M1 is a measure of the money supply that includes the most liquid forms of money within an economy. It consists of three main components: currency in circulation, demand deposits (checking accounts), and other highly liquid deposits, such as savings deposits. M1 represents the money that is readily available for transactions and can be used for immediate payments. It provides an important gauge of the amount of money circulating in an economy and is used by economists and policymakers to assess liquidity and monetary conditions.
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