Question

Identify whether each of the following belongs in M1 and M2. Be sure to state if it belongs in both. -Andy has $20,000 in a money market account. -Hillary has $6,000 in a two-year certificate of depos

Answer 1

Amy's father, Carlos, lives in Sweden. For each of the following transactions that occur in . ... transactions that occur in their lives, identify whether it is included in the calculation of ...

Answer 2

a. A money market account belongs to M2.

b. A roll of quarters is cash held by the public. It belongs to both M1 and M2 because of this.

c. A checking account belongs to both M1 and M2 because it is a transaction deposit.

d. A certificate of deposit belongs to M2. This is because it's a timed deposit.

The main difference is that money in M1 can be used as liquid cash and money in M2 cannot.