The M1 type of money includes __________. a.) demand deposits only b.) demand deposits and time deposits c.) physical currency only d.) physical currency and demand deposits SUBMIT MY ANSWER Report an issue with this question Kate Eskra Kate Eskra Sophia Tutorial Sophia Tutorial M0, M1, M2 Sophia Tutorial Sophia Tutorial Make my favorite instructor PDF Version WHAT'S COVERED This lesson will cover the classification of money according to its liquidity, using the categories M0, M1, and M2. Specifically, this lesson will cover: 1. Functions of Money 2. Liquidity of Money 3. Classification of Money 3a. M0 3b. M1 3c. M2 4. Tools of the FOMC Terms to Know 1. Functions of Money As a reminder, there are three functions of money: Function of Money Purpose Medium of Exchange Used as an intermediary to facilitate nonbarter-based trade; in other words, allows us to get what we want (e.g., debit card, cash, and check) Store of Value Has a recognized value that can be stored and retrieved Unit of Account Allows comparison of the value of different items; used in financial transactions and record keeping 2. Liquidity of Money Now, most people likely tend to think of bills and coins when