How does M1+ compare with M2?
A) M1+ is smaller and less liquid than M2.
B) M1+ is smaller but more liquid than M2.
C) M1+ is larger than and less liquid than M2.
D) M1+ is larger than but more liquid than M2.

Question

Quizplus · Accepted Answer

M1+ includes all components of M1 (cash, checking accounts, and traveler's checks) plus some less liquid assets such as savings accounts and money market funds. Therefore, M1+ is smaller than M2 but more liquid because it includes all components of M1 plus additional components that are slightly less liquid.

How Does M1+ Compare with M2