Which statement is correct?
A) M1 is always larger than M2.
B) M2 is always larger than M1.
C) M1 is larger than M2 during recessions,while M2 is larger than M1 during expansions.
D) M2 is larger than M1 during recessions,while M1 is larger than M2 during expansions.

Question

Quizplus · Accepted Answer

M2 includes all of M1 (cash and checking deposits) plus savings deposits, money market securities, and other time deposits, making it always larger than M1.

Which Statement Is Correct