M2

M2 is a measure of the money supply within an economy, which includes cash, checking deposits, and easily convertible near-money. It encompasses all of M1 (which includes physical currency and demand deposits) plus savings accounts, time deposits, and other liquid assets that can quickly be turned into cash. Economists use M2 to analyze the money available for spending and investment, as it offers insights into economic health, consumer behavior, and inflation trends. Monitoring M2 helps central banks make decisions about monetary policy to promote stable economic growth.