March 17, 2018 

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M2: The medium-range monetary aggregate for the U.S. economy containing the combination of M1 (currency and checkable deposits) and short-term, small denomination near monies. M2 contains financial assets that either function directly as money for the U.S. economy or can be easily and quickly converted into money. The near monies added to M1 to derive M2 include savings deposits, certificates of deposit, money market deposits, and money market mutual funds. M2 is one of three monetary aggregates tracked and reported by the Federal Reserve System. The other two are designated M1 and M3.

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Lesson 20: Federal Reserve System | Unit 4: Monetary Policy Page: 12 of 20

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The Federal Reserve controls banks as a means of controlling the money supply.

A more specific definition:

Monetary policy is controlling the money creation activity of the fractional-reserve banking system to control deposits and the money supply to affect business-cycle fluctuations.

Early tasks of the Fed:

  • To keep banks in business and to avoid serious reductions in bank reserves that would shrink financial wealth and money supply.

    What the Fed does now:

  • Manipulate the money supply by manipulating reserves.

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The process or goal of obtaining the highest level of utility from the consumption of goods or services. The goal of maximizing utility is a key assumption underlying consumer behavior studied in consumer demand theory. Consumers are assumed to make choices, especially concerning the purchase of goods, such that they obtain the highest possible level of satisfaction. Utility maximization can be achieved at the peak of the total utility curve.

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Today, you are likely to spend a great deal of time looking for a downtown retail store wanting to buy either a flower arrangement with daisies and carnations for your uncle or a coffee cup commemorating next Thursday. Be on the lookout for telephone calls from long-lost relatives.
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Rosemary, long associated with remembrance, was worn as wreaths by students in ancient Greece during exams.
"If football taught me anything about business, it is that you win the game one play at a time."

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