what is the difference between the m1 and m2 money supplies 
the term money supply refers to the total amount of currency and liquid assets in a country s economy it includes any money found in circulation as well as any bank deposits that can be converted to cash the money supply is divided into categories based on the type of currency for instance m1 is classified as any physical money banknotes and coins as well as money held in liquid vehicles like bank accounts m2 is a broader category that includes everything in m1 as well as money market funds and short term time deposit such as a certificate of deposit cd 