Currency held by commercial banks and thrifts is excluded from the money supply M1, so as to Blank______.

Question

Multiple select question.

expand the definition of money

avoid counting money that is not available to the private sector

increase the amount of credit available to individuals

avoid double counting

Answer 1

The correct options to fill in the blank regarding why currency held by commercial banks and thrifts is excluded from the money supply M1 are:

• avoid counting money that is not available to the private sector
• avoid double counting

These options highlight the intention behind the definition of M1, which focuses on the most liquid forms of money available to the public, excluding amounts that are not readily accessible for transactions.