Question

The Money Aggregates that economists track. The two aggregates of primary importance are M1 and M2, distinguished by the degree of liquidity of the money categories contained in them. We examined data presenting the change in the size of these aggregates over time. We observed an historic and unprecedented sharp increase in the size of both M1 and M2 in the years 2009-2019. However, the increase was far greater in one of these aggregates than it was in the other one. Which of the two Money Aggregates, M1 and M2, experienced the MORE rapid increase in size during the years 2009-2019?

Answer 1

Money aggregates are broad categories that measure the money supply in an economy.The monetary base is an aggregate that includes the total supply of currency in circulation plus the stored portion of commercial bank reserves within the central bank.