M1 differs from M2 in that:
A)M1 includes currency and balances held in checking accounts, which are not included in M2.
B)M2 includes savings deposits, small-denomination time deposits, and money market mutual funds that are not included in M1.
C)M1 is a broader measure of the money supply than M2.
D)the assets in M2 are more liquid than the assets in M1.

Question

Quizplus · Accepted Answer

M2 is a broader measure of money than M1, thus it contains assets that are less liquid than M1. Note that everything included in M1 is by definition also included in M2, but the opposite is not true.

M1 Differs from M2 in That