Which of the following is a component of the money supply?

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Multiple Choice

Which of the following is a component of the money supply?

Explanation:
Currency in circulation is the cash people can use right away to buy goods and services, so it serves as an immediate medium of exchange and is a fundamental part of the money supply. Time deposits are liquid but not immediately spendable, so they’re not counted as money in the same way. Stocks and bonds are financial assets, not money used for transactions, so they don’t form part of the money supply.

Currency in circulation is the cash people can use right away to buy goods and services, so it serves as an immediate medium of exchange and is a fundamental part of the money supply. Time deposits are liquid but not immediately spendable, so they’re not counted as money in the same way. Stocks and bonds are financial assets, not money used for transactions, so they don’t form part of the money supply.

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