M2

Dictionary Says

Definition of '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.
Investopedia Says

Investopedia explains 'M2'

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.

Related Definitions

  • M1

    A category of the money supply that includes all physical money such as coins and currency; it also includes demand deposits, which are checking accounts, and Negotiable Order of ...
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  • M3

    The category of the money supply that includes M2 as well as all large time deposits, institutional money-market funds, short-term repurchase agreements, along with other larger liquid ...
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  • Monetary Policy

    The actions of a central bank, currency board or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates. Monetary ...
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    • Money Supply

      The entire quantity of bills, coins, loans, credit and other liquid instruments in a country's economy.
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    • Narrow Money

      A category of money supply that includes all physical money like coins and currency along with demand deposits and other liquid assets held by the central bank. In the United States ...
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    • M0

      A measure of the money supply which combines any liquid or cash assets held within a central bank and the amount of physical currency circulating in the economy. In the United Kingdom, ...
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    • Expansionary Policy

      A macroeconomic policy that seeks to expand the money supply to encourage economic growth or combat inflation (price increases). One form of expansionary policy is fiscal policy, which ...
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    • Monetary Aggregates

      Broad categories measuring the total value of the money supply within an economy. In the United States, the standardized monetary aggregates and their measured contents are known as:M0 – ...
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