Question

What measure of money is largest? a. Cash b. Checking accounts c. m2 d. m1

What measure of money is largest?

a. Cash

b. Checking accounts

c. m2

d. m1

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Answer #1

M2 includes everything in M1 as well as savings deposits, time deposits below USD 100,000, and balances in retail money market funds. It is often referred to as an intermediate measure because it is broader than M1 but not quite as broad as M3.

It is also reported weekly and monthly by the Federal Reserve. M2 plays an essential role in any discussion about money supply because it often provides more comprehensive insights than M1 alone. Many economic activities include transactions between different types of accounts, which is only partially included in M1.

So above given options M2 is a largest measure .

Hence (C) part is a correct answer

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