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QUESTION:

Money aggregates

Identify whether each of the following examples belongs in M1 or M2. If an example belongs in both, be sure to check both boxes.

Example
M1
M2
Megan has $6,000 in a six-month certificate of deposit (CD).
Larry has $30,000 in a money market account.
Felix has $1,200 in a checking account.

ANSWER:

Identify whether each of the following examples belongs in M1 or M2. If an example belongs in both, be sure to check both boxes.
Example
M1
M2
Megan has $6,000 in a six-month certificate of deposit (CD).
Larry has $30,000 in a money market account.
Felix has $1,200 in a checking account.




Points:
0.83 / 1
Close Explanation
Explanation:
M1 includes currency (like the money in Felix's checking account), demand deposits at banks, and savings account deposits.
M2 includes everything in M1 plus small time deposits (such as Megan's CD) and money market funds (excluding those held in restricted retirement accounts).

Posted by Cleveland on September 9, 2024
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