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True or false: M2+ is equal to M2 plus deposits at near-banks.True false question.TrueFalse

Question

True or false:

M2+ is equal to M2 plus deposits at near-banks.

True false question.

True False

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Solution

The statement "M2+ is equal to M2 plus deposits at near-banks" is True.

Explanation:

M2 is a measure of the money supply that includes all elements of M1 (which consists of physical cash and checkable deposits) plus savings accounts, time deposits under $100,000, and other near-money assets. "Near-banks" typically refers to financial institutions that are not traditional banks but offer similar services, such as savings and loan associations or credit unions.

Therefore, when you add deposits at near-banks to the M2 money supply, you are indeed expanding the definition of M2 to include a broader range of liquid assets, thus resulting in M2+. Hence, the statement holds true.

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