What are the components of the M2 money supply?
Key Takeaways
- M2 is a measure of the money supply that includes cash, checking deposits, and easily convertible near money.
- M2 is a broader measure of the money supply than M1, which just includes cash and checking deposits.
What is near near money?
What Is Near Money? Near money, sometimes referred to as quasi-money or cash equivalents, is a financial economics term describing non-cash assets that are highly liquid and easily converted to cash.
What are the components of M2?
M2 consists of M1 plus (1) small-denomination time deposits (time deposits in amounts of less than $100,000) less individual retirement account (IRA) and Keogh balances at depository institutions; and (2) balances in retail money market funds (MMFs) less IRA and Keogh balances at MMFs.
What are near cash securities?
Near money is a term used to describe non-cash assets that are very liquid and that are easily convertible into cash. It is also referred to as quasi-money or cash equivalents. Examples of near money are: Money market securities.
What components make up M1 M2 and MZM?
The broader classification, M2, also includes savings account deposits, small time deposits, and retail money market accounts. Closely related to M1 and M2 is Money Zero Maturity (MZM). MZM consists of M1 plus savings deposits and all money market accounts, including institutional money market funds.
What is M1 M2 money supply?
M1 money supply includes those monies that are very liquid such as cash, checkable (demand) deposits, and traveler’s checks M2 money supply is less liquid in nature and includes M1 plus savings and time deposits, certificates of deposits, and money market funds. These are the amounts held in checking accounts.
What is a near bank?
A financial institution (such as a credit union) that provides lending and deposit services but does not have the status of a chartered bank.
Which among the following is a near money?
T-bills, Equity shares of a company, Bill of exchange and Debentures are all considered as near money.
What is M1 M2 and M3 money?
M1, M2 and M3 are measurements of the United States money supply, known as the money aggregates. M1 includes money in circulation plus checkable deposits in banks. M2 includes M1 plus savings deposits (less than $100,000) and money market mutual funds. M3 includes M2 plus large time deposits in banks.
What is cash security?
Cash Security means all cash, instruments, Deposit Accounts, Securities Accounts and cash equivalents, in each case whether matured or unmatured, whether collected or in the process of collection, upon which a Credit Party presently has or may hereafter have any claim or interest, wherever located, including but not …
Is near cash an asset?
Cash is an asset that retains its face value, is highly liquid and can be called upon for immediate use. Near-cash assets are financial instruments that exhibit similar characteristics to cash.
What is the M1 and M2 money supply?
M1 money supply includes those monies that are very liquid such as cash, checkable (demand) deposits, and traveler’s checks. M2 money supply is less liquid in nature and includes M1 plus savings and time deposits, certificates of deposits, and money market funds.