M1 is considered ___________ measure of money compared to M2.
A)a more legitimate
B)a less legitimate
C)just as legitimate a
D)Neither of these is a particularly good measure of money.

Question

Quizplus · Accepted Answer

M1 and M2 are both legitimate measures of money, but M1 is considered a narrower measure since it only includes the most liquid forms of money such as physical currency, demand deposits, and traveler's checks. M2 includes M1 plus less liquid forms of money such as savings accounts, time deposits, and money market funds. Therefore, M2 is a broader measure of money compared to M1.

M1 Is Considered ___________ Measure of Money Compared to M2