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which one of the following is the largest component of the money supply (M) in the...

which one of the following is the largest component of the money supply (M) in the US a. checkable deposits b. gold certificates c. credit cards and travelers checks d. federal reserve notes e. certificate of deposits and credit cards

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Answer #1

Which one of the following is the largest component of the money supply M1 in the US

d. Federal Reserve Notes.

(M1 is the most liquid form of currency.The largest compenents of M1 is the currency in regulation,which is the Federal Reserve Notes.In the United States the Money supply M1 consists of coins, paper currencies - Federal reserve notes,as well as checkable deposits.M1 currency is most liquid and easy to use,thus its available largely.Although checkable deposits are a part of M1, but they do not form the largest component of it.The other options mentioned above do not fall in the category of M1,as they are comparatively less liquid.)

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