M2 is
A) equal to M1, but only when all three functions of money apply.
B) larger than M1.
C) equal to M1, given full employment.
D) smaller than M1.

Name: M2 is A) equal to M1, but only when all three functions of money apply. B) larger than M1. C) equal to M1, given full employment. D) smaller than M1.
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Question

Quizplus · Accepted Answer

M2 includes all of M1 (cash, checking deposits, and traveler's checks), but also includes savings deposits, money market securities, and other time deposits. Therefore, M2 is larger than M1.

M2 Is