Question

Which of the following is not a correct statement about​ M2? A. M2 is a broader definition of money compared to M1 and currency. B. M2 includes savings​ accounts, small-denomination time​ deposits, and money market mutual funds. C. M2 includes all of the assets in M1. D. M2 is the best definition of money as a medium of exchange.

Answer 1

Answer:

D) M2 is the best definition of money as a medium of exchange.

Explanation:

M2 includes all M1 plus some broader types of money which represent near money such as savings accounts, money market securities, mutual funds, small denomination time deposits (CDs worth less than $100,000). These are classified as ear money because they can be easily and quickly converted into currency (cash) or checking account deposits.