Question

What components of money do we count as part of $M1$?

Short answer

Cash and coin circulation, account checking, and many more we count as part of $M1$.

Step-by-step solution

Concept on M1.

The $M1$ phrase is commonly used to describe money, which encompasses cash and coin circulation, account checking, and so on. It's a highly liquid investment.

Explanation of solution.

The demand deposit, also known as a checkable deposit, is very near to the currency. They are the funds maintained in checking accounts. The demand deposit is maintained by banks because the depositor of money can demand their deposited amount at any moment via check or debit card, and the bank must comply. The $M1$is made up of these checking accounts and currencies. The traveller's check is likewise included in $M1$, but its use has decreased over time.