What is the meaning and composition of M 1?
M 1 is a narrow sense of money supply, which refers to those creditor's rights that can be paid directly, immediately and without restriction. These claims are liquid and can be used for payment immediately, conveniently and cheaply. It best conforms to the traditional definition of money as a means of payment. Generally speaking, M 1 includes currency, demand deposits, traveler's checks and other checking deposits. 1. Money consists of coins and paper money in circulation. 2. Demand deposits refer to interest-free checking accounts of commercial banks, excluding deposits of other banks, governments and foreign governments. Traveler's checks refer to those checks that can only be issued by non-bank institutions (such as American Express). Traveler's checks issued by banks are included in current deposits. 4. Other checking deposits refer to interest-bearing checking accounts with various legal arrangements and various market names.
What is the meaning and composition of M2?
M2 is money supply in a broad sense, based on M 1, plus assets used as a medium of exchange, most of which are savings deposits and small time deposits of banks and savings institutions. The difference between M2 and M 1, that is, the sum of the company's time deposits and individual savings deposits, is usually called quasi-currency. Generally speaking, M2 includes M 1, money market share, money market deposit accounts, savings deposits and small time deposits. 1. Money market * * * MMMFs share refers to interest-bearing cheque deposits invested in short-term assets. Some MMMF shares are held by institutions. They are not included in M2, but included in M3. 2. Money market deposit account (MMDAs) refers to MMMFs operated by banks, and its advantage is that it has insurance as high as 654.38 million+USD. 3. Savings deposits refer to deposits in banks and other savings institutions, which cannot be transferred by cheque, and are usually recorded in a separate passbook held by depositors. 4. Small time deposits refer to interest-bearing deposits with a specific maturity of less than $654.38 million+,and a penalty must be paid for withdrawals before the maturity date.