What does M2 mean?

M2 is a measure of the money supply that includes cash, checking deposits, savings deposits, money market securities, and other time deposits. It is used by economists and analysts to gauge the amount of money in circulation and to assess the overall health and stability of an economy. M2 is considered an important indicator of inflation and economic growth, as changes in the money supply can impact interest rates, consumer spending, and investment activity. In the context of finance, M2 is used to analyze and forecast economic trends, as well as to inform monetary policy and financial decision-making.