M-1 is a more reliable measure of money supply than M-2.

Question

Quizplus · Accepted Answer

M-1 includes only the most liquid forms of money, such as cash, checking accounts, and traveler's checks. M-2 includes all of M-1 plus less liquid forms of money, such as savings accounts and money market accounts. While M-1 can be a useful gauge for short-term economic activity, M-2 provides a more complete picture of the money supply over time. Therefore, M-2 is considered a more comprehensive measure of the money supply, although both measures are used by economists and policymakers.

M-1 Is a More Reliable Measure of Money Supply Than