Principles of Macroeconomics / Unit 11 MAC 1007 short lesson, about 20 seconds
M1 and M2
Captions available
The idea
M1 is currency in circulation plus checkable and savings deposits. M2 is M1 plus small time deposits and retail money market funds. Savings deposits moved into M1 in May 2020, so older sources place them in M2.
In practice
M1 sits inside M2, so the two are nested rather than separate.
Where people slip
The central bank no longer steers by any single measure.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
Unlocks
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