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find the size of M1 money supply and M2 money supply in the U.S. financial system....

find the size of M1 money supply and M2 money supply in the U.S. financial system. visit FRED (www.stlouisfed.org)

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Sol: 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. The M1 is no longer used as a guide for monetary policy in the United States due to the lack of correlation between it and other economic variables.While M2 is a calculation of the money supply that includes all elements of M1 as well as near money. It is a broader measure of the money supply than M1 & is closely watched as an indicator of money supply and future inflation & as a target of central bank monetary policy.

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