M2 metric…

[dasari4kntr]

In the context of Federal Reserve (Fed) reports, M1 and M2 are classifications of the money supply. They are measures of the amount of money circulating in the economy and are used to analyze the effectiveness of monetary policy and to forecast macroeconomic variables such as inflation.

M1: M1 is the most liquid category of the money supply and includes the money that is readily available for spending. It consists of:

Currency in circulation: Physical money (bills and coins) held by the public.

Demand deposits: Checking account balances held in banks or other financial institutions, which can be easily accessed for transactions.

Traveler's checks: Although less common today, these are checks that function as cash and can be used as a medium of exchange, primarily for travel purposes.

Other checkable deposits: Deposits in banks that can be accessed by writing checks, such as NOW (Negotiable Order of Withdrawal) accounts.

M2: M2 is a broader measure of the money supply, encompassing M1 and adding additional categories of less-liquid assets. M2 includes:

All components of M1.

Savings deposits: Interest-bearing accounts in banks or other financial institutions, which have limited transaction capabilities compared to checking accounts.

Small-denomination time deposits: Interest-bearing deposits with a value of less than $100,000 and a specific maturity date. These deposits cannot be easily withdrawn before the maturity date without a penalty.

Retail money market funds: Pooled investments in short-term debt instruments, primarily offered by banks and other financial institutions to individual investors.

 

M1 and M2 are used by economists and policymakers to understand the relationship between the money supply and economic activity. In general, a growing money supply can lead to increased economic activity, while a shrinking money supply can have a contractionary effect on the economy. However, excessive growth in the money supply can also result in inflation, which is why central banks, such as the Federal Reserve, carefully monitor these indicators when implementing monetary policy.

[Sreeven]

Thatha malli .25bp penchutademo..

[dasari4kntr]

 

[Naakendukuu]

that's why the average debt is increasing at an alarming rate 

[AndhraneedSCS]

March lo home prices perigayi.