Which statement best summarizes the difference between $M-1$ and $M-2?$

The M$-2$ definition includes everything in the M$-1$ definition, plus additional components such as money in savings accounts, money market accounts, and certificates of deposit.

The M$-1$ definition of the money supply includes only domestic currencies while the M$-2$ definition includes foreign currencies.

The M$-1$ money supply consists only of the currency $($coins and paper money$)$ that circulates in our economy, while the M$-2$ includes traveler's checks and funds in demand deposits.

The M$-1$ definition consists of hard currencies which are backed by gold and silver, while M$-2$ consists of soft currencies which are not backed by gold and silver.