M1 differs from M2 because ________.
A)M1 includes demand deposits and M2 does not
B)M1 includes currency held by the nonbank public and M2 includes only currency held by banks
C)M2 includes interest bearing time deposit accounts and M1 does not
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

M2 is a broader measure of the money supply than M1. It includes all of M1 (currency, demand deposits, and other liquid deposits) plus savings deposits, money market deposit accounts, and small-denomination time deposits (under $100,000), which are interest-bearing.

M1 Differs from M2 Because ________