A monetary asset is anything that can be counted in one of the money supply meas

Question

A monetary asset is anything that can be counted in one of the money supply measures. First, identify the monetary asset as being money or near monies. The next step is to identify in which money supply category t monetary asset belongs. Does the monetary asset belong to M1? M2? Place the following terms in the appropriate categories. Each term will fit more than one category. Money Near monies M1 money supply Currency held by people Demand deposits Money market accounts Savings accounts M2 money supply

Explanation / Answer

Near money is the one that can readily be converted in cash and such examples here are savings accounts and money market accounts

Money is the amount that person can spend anytime without any prior notice and this is currency and demand deposits

M1 money supply includes money items the most liquid ones so these are currency and demand deposits

M2 money supply includes m1 money supply and near money so all the given elements can be places in m2 money supply

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