How are term deposits treated in M1 as compared to M2?
A)They are included in M1 but not M2.
B)They are included in M1 and M2.
C)They are included in M2 but not M1.
D)They are included in neither M1 nor M2.

Question

Quizplus · Accepted Answer

Term deposits, also known as time deposits, are included in M2 but not in M1. M1 includes only the most liquid forms of money such as physical cash, demand deposits, and traveler's checks, while M2 includes M1 plus other less liquid forms of money like savings deposits and time deposits.

How Are Term Deposits Treated in M1 as Compared to M2