Bifalgorithm post · IntroductionToBusiness OP 8D04gAa · 2026-10-07-36573 · Glossary

What is money and what are the three parts of the U.S. money supply?

What is money and what are the three parts of the U.S. money supply? (IntroductionToBusiness OP 8D04gAa · 2026-10-07-36573 · Glossary) — "Money is anything tha…

Ideas in this flowchart

  • Money is anything acceptable as payment for goods and services.
  • Money serves as a means of exchange.
  • Requirements for suitable money
  • Money should be scarce.
  • Money should be durable.
  • Money should be portable.
  • Money should be divisible.
  • Functions of money
  • Money functions as a medium of exchange.
  • Money functions as a standard of value.
  • Money functions as a store of value.
  • The U.S. money supply includes currency, demand deposits, and time deposits.
  • Currency consists of coins and paper money.
  • Demand deposits are funds in checking accounts that can be withdrawn on demand.
  • Time deposits pay interest but cannot be withdrawn on demand.
  • M1 is readily available money consisting of currency and demand deposits.
  • M2 includes all M1 money, time deposits, and other money that is not immediately accessible.
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What is money and what are the three parts of the U.S. money supply?

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IntroductionToBusiness OP 8D04gAa · 2026-10-07-36573

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"Money is anything that is acceptable as payment for goods and services. For money to be a suitable means of exchange, it should be scarce, durable, portable, and divisible. Money functions as a medium of exchange, a standard of value, and a store of value. The U.S. money supply consists of currency (coins and paper money), demand deposits (checking accounts), and time deposits (interest-bearing deposits that cannot be withdrawn on demand). Currency is cash held in the form of coins and paper money. Demand deposits are money kept in checking accounts that can be withdrawn by depositors on demand. M1 is the total amount of readily available money in the system and includes currency and demand deposits. M2 is a term used by economists to describe the U.S. monetary supply; it includes all M1 monies plus time deposits and other money that is not immediately accessible. Time deposits are deposits at a bank or other financial institution that pay interest but cannot be withdrawn on demand."

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