Rather than trying to state a single way of measuring money, economists offer broader definitions of money based on the concept of liquidity. Where is all the cash?If you take $100 out of your piggy bank and deposit it in your checking account, how did M1 change? But what about checks or credit cards? What exactly is included?Cash in your pocket certainly serves as money. It includes Closely related to currency are checkable deposits, also known as A broader definition of money, M2 includes everything in M1 but also adds other types of deposits. Are they money, too? For finance class I need to calculate the growth rate of m1 and m2 for years 2007 and from Jan 2007 to Dec 2007. To provide an idea of what these amounts sound like, according to the Federal Reserve Bank’s measure of the U.S. money stock, at the end of February 2015, M1 in the United States was $3 trillion, while M2 was $11.8 trillion. November 23, 2013. http://www.federalreserve.gov/RELEASES/h6/current/default.htm#t2tg1link.M1 and M2 Federal Reserve Statistical Release, Money Stock Measures M1: currency plus demand deposits (checking accounts) = $60 b + $170 b = $230 billion. Are they money, too? But having more credit cards or debit cards does not change the quantity of money in the economy, any more than having more checks printed increases the amount of money in your checking account.One key message underlying this discussion of M1 and M2 is that money in a modern economy is not just paper bills and coins; instead, money is closely linked to bank accounts. But what about checks or credit cards? But having more credit cards or debit cards does not change the quantity of money in the economy, any more than having more checks printed increases the amount of money in your checking account.One key message underlying this discussion of M1 and M2 is that money in a modern economy is not just paper bills and coins; instead, money is closely linked to bank accounts. Cash in your pocket certainly serves as money. Practice until you feel comfortable doing the questions. We defined money as anything that is generally accepted as a means of payment, is a store of value, can be used as a unit of account or a standard of deferred payment. Closely related to currency are checkable deposits, also known as demand deposits. What exactly is included?Cash in your pocket certainly serves as money. We defined money as anything that is generally accepted as a means of payment, is a store of value, can be used as a unit of account or a standard of deferred payment. Sometimes elements of M1 are not treated alike; for example, some businesses will not accept personal checks for large amounts, but will accept traveler’s checks or cash. For example, M2 includes The Federal Reserve System is responsible for tracking the amounts of M1 and M2 and prepares a weekly release of information about the money supply. Sometimes elements of M1 are not treated alike; for example, some businesses will not accept personal checks for large amounts, but will accept traveler’s checks or cash. A In short, credit cards, debit cards, and smart cards are different ways to move money when a purchase is made. As with many other economic terms and statistics, the important point is to know the strengths and limitations of the various definitions of money, not to believe that such definitions are as clear-cut to economists as, say, the definition of nitrogen is to chemists.Where does “plastic money” like debit cards, credit cards, and smart money fit into this picture?

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