What are included in the two categories of the money supply?

The money supply is typically categorized into two main components: M1 and M2. M1 includes the most liquid forms of money, such as cash, coins, and demand deposits (checking accounts). M2 encompasses M1 along with less liquid forms, such as savings accounts, time deposits, and money market accounts. Together, these categories reflect the total amount of money available in an economy for transactions and savings.