The M2 measure of money is suggested by the ________ approach to measuring money.

Question

Quizplus · Accepted Answer

The M2 measure includes all the components of M1 (cash in circulation, demand deposits, and other checkable deposits) and adds savings deposits, time deposits, and money market mutual funds. This reflects the liquidity approach to measuring money, which takes into account the ease with which different assets can be converted into cash to make transactions. The investment and speculative approaches focus on the role of money as an asset for investment or speculation, while the transactions approach considers the needs of the economy for a medium of exchange.

The M2 Measure of Money Is Suggested by the ________