why is m2 more stable than m1 
the m2 money supply is more stable than the m1 money supply because the m1 money supply only contains the most liquid of assets whereas it may take a little longer for components of the m2 money supply to convert or be liquidated the m1 money supply more often changes due to the ease of being able to transact who controls the m1 money supply the total supply of money is managed by the federal reserve banks the federal reserve banks establish monetary and fiscal policies to influence the economy create jobs or combat inflation 