Which statement about M1 and M2 is correct?
A) M1 is the broader measure of money.
B) M2 is greater than M1.
C) M1 includes savings deposits.
D) M2 excludes currency.

Question

Quizplus · Accepted Answer

M2 includes all components of M1 (cash, checks, and checking deposits) as well as additional types of deposits, such as savings deposits, time deposits, and money market funds. Therefore, M2 is always greater than M1.

Which Statement About M1 and M2 Is Correct