The M1 money supply is composed of a. currency, demand deposits, traveler's checks, and other checkable accounts.
b. currency, demand deposits, savings deposits, money market mutual funds, and small time deposits.
c. currency, government bonds, gold certificates, and coins.
d. currency, NOW accounts, savings accounts, and government bonds.
e. none of the above.

a. currency, demand deposits, traveler's checks, and other checkable accounts.

Explanation:

The M1 money supply is composed of currency, demand deposits, traveler's checks, and other checkable accounts.

Basically, M1 comprises of the most liquid part of money being supplied and as such can be easily and quickly converted to cash equivalent because it is made up of assets and currency.

Additionally, M1 of money supply only comprises of items that are directly and immediately usable as a medium of exchange when purchasing various goods and services. Thus, M1 doesn't include financial assets and securities such as bonds, savings accounts etc.

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