How are savings deposits treated in M1 as compared to M2?
A)They are included in M1 but not M2.
B)They are included in M2 but not M1.
C)They are included in M1 and M2.
D)They are included in neither M1 nor M2.

Question

Quizplus · Accepted Answer

Savings deposits are included in M2 but not M1. M1 only includes the most liquid forms of money such as physical currency, checking deposits, and traveler's checks. M2 includes all of M1 plus other slightly less liquid forms of money such as savings deposits, small time deposits, and money market mutual funds.

How Are Savings Deposits Treated in M1 as Compared to M2