Characteristics of money

In monetary aggregate, money divided in 3 kinds

They are :

1. M 1

M1 is clearly money. Because they can used directly as a medium of exchange. It includes currency, checking account deposits and traveler's checks.

M1 = Currency + traveler's check + demand deposits + other check able deposits 

    

     2.   M 2

M2 monetary aggregate adds to M1 other assets that have check-writing features (money market deposits accounts and money market mutual fund shares) and other assets (small denomination, time deposits, overnight, repurchase agreement and overnight Eurodollars)  that are extremely liquid

M2 = M1 + Small-denomination time deposits + saving deposits and money market deposits accounts + moneymarket mutual funds shares

      3.   M 3

The M3 monetary aggregate adds to M2 somewhat less liquid assets such as large denomination time deposits, term repurchase agreement, term Eurodollars, and institutional money market mutual fund shares

M3 = M2 + large-denomination time deposits + money market mutual fund shares + term repurchase agreements + term Eurodollars