Which statement is correct?
a. M2 includes M1.
b. M1 includes assets primarily used as a means of savings.
c. M2 measures assets primarily used as a medium of exchange.
d. The Federal Reserve discontinued reporting on M1 and M2 because they provide little insight into the state of the economy.

a. M2 includes M1

Explanation:

Base on the scenario been described in the question, the correct statement is M2 includes M1

M2 is a computation of the money supply that involves all members of M1 as well as "near money." M1 involves checking deposits and cash, while near money means deposits which are being saved, , mutual funds, money market securities and other time deposits

Answer is A. M2 includes M1.

Refer below.

Explanation:

Below statement is correct:

M2 includes M1.

answer the law of increasing costs;