What Is an M1 and M2

M1, M2 and M3 are measurements of the United States money supply, known as the money aggregates. M1 includes money in circulation plus checkable deposits in banks. M2 includes M1 plus savings deposits (less than $100,000) and money market mutual funds. M3 includes M2 plus large time deposits in banks.

What is meant by M1 in economics?

M1 is a narrow measure of the money supply that includes physical currency, demand deposits, traveler’s checks, and other checkable deposits. M1 does not include financial assets, such as savings accounts and bonds.

What is the difference between M1 and M2 give an example of each?

What is the difference between M1 and M2? Give an example of each. M1 represents money that people can gain access to easily and immediately to pay for goods and services (such as cash-on-hand). M2 consists of all the assets in M1 plus several additional assets (such as savings deposits in banks).