Although most bank accounts pay some interest, depositors can get a higher interest rate by buying a

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Although most bank accounts pay some interest, depositors can get a higher interest rate by buying a certificate of deposit, or CD. The difference between a CD and a checking account is that the depositor pays a penalty for withdrawing the money before the CD comes due — a period of months or even years. Small CDs are counted in M2 but not in M1. Explain why they are not part of M1.

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Macroeconomics

ISBN: 9781319245269

6th Edition

Authors: Paul Krugman, Robin Wells

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