•Two measures of the Money Supply
•M1
•Narrowest definition of money consists of
• Money in circulation (cash)
•Travelers checks
•Checkable bank deposits, (checking, debit and some moneymarket accounts)
•M2
•The broader definition of money
•Adds several other types of assets
•Near money or financial assets that aren’t directly usable as amedium of exchange but can be readily converted into cash orcheckable bank deposits.
•M1 + saving accounts and time deposits (small denomination CD”S)