Understanding Money Supply

What is the money supply defined as?

• The total quantity of money circulating in the economy

• The total quantity of investments in the economy

• The total quantity of goods in the economy

• The total quantity of services in the economy

Which of the following is included in M1?

• Institutional money market funds

• Traveler's checks

• Time deposits over $100,000

• Savings deposits

What additional elements does M2 include beyond M1?

• Retail money market funds

• Time deposits over $100,000

• Term repurchase agreements

• Institutional money market funds

What is included in M3 that is not in M2?

• Retail money market funds

• Time deposits over $100,000

• Demand deposits

• Traveler's checks

Why did the Federal Reserve stop reporting M3?

• M3 was more liquid than M1

• M3 was too broad to measure

• M3 did not provide additional relevant information beyond M2

• M3 was too narrow to be useful