Question

If you were given the task of totalling all the M2 money in circulation in the US, which of the following would you include in your calculations?
a. Demand deposits and other checking accounts
b. Currency
c. Savings accounts

Answer 1

Answer: Savings account

Explanation:

The money supply is the total amount of money that are available in an economy at a particular point in time.

M2 is a calculation used to know the value of money supply in circulation. M2 includes all elements M1 plus certificate of deposit, savings account and money market account. It should be noted that M1 is made up of currency PL s travellers check and checking accounts.

Therefore, of the options given above, savings account is added when calculating M2 money supply.