Definition of M2

M2 is a measure of money supply, which includes M1 plus all time deposits, savings accounts and non-institutional money market accounts.

Applying "M2" to Securities Exams:

Includes all the measures in M1 ( cash and checking accounts) plus:

  • Money market instruments
  • Time deposits of less than $100,000
  • Negotiable CD exceeding $100,000
  • Overnight repurchase agreements

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