M2

M2

A category within the money supply that includes M1 in addition to all time-related deposits, savings deposits, and non-institutional money-market funds.

Notes:

M2 is a broader classification of money than M1. Economists use M2 when looking to quantify the amount of money in circulation and trying to explain different economic monetary conditions.

See also: M1, M3, Monetary Policy, Money Supply, Narrow Money

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M2

Measure of the U.S. money stock that consists of M1, certain overnight repurchase agreements and certain overnight Eurodollars, savings deposits (including money market deposit accounts), time deposits in amounts of less that $100,000 and balances in money market mutual funds (other than those restricted to institutional investors).

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M2

A measure of the domestic money supply that includes M1 plus savings and time deposits, overnight repurchase agreements, and personal balances in money market accounts. Basically, M2 includes money that can be used for spending (M1) plus items that can be quickly converted to M1.