The difference between M1 and M2 is given by which of the following?
a. M1 includes currency, coins, gold and silver, whereas M2 does not contain gold and silver.
b. M1 is made up of currency, traveler's checks, and money in checkable accounts, whereas M2 contains M1 plus savings deposits and time deposits.
c. M1 is limited to currency, whereas M2 contains M1 plus traveler's checks and money in checkable accounts.
d. M1 includes currency and traveler's checks, whereas M2 contains M1 plus money in checking accounts.
b
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Define GDP
What will be an ideal response?
Those economists who argue that a significant amount of crowding out exists believe that the impact of expansionary fiscal policy will be _________________ by the crowding out. Their reasoning is that if the government increases purchases, and finances that spending by borrowing money, spending in the private sector will _______________, leading ultimately to _____________ in aggregate demand
A) strengthened; fall; little or no change B) strengthened; rise; a significant rise C) weakened; fall; little or no change D) weakened; rise; a significant rise
Real income can be determined by:
A. dividing the price level by nominal income. B. deflating nominal income for inflation. C. inflating nominal income for inflation. D. dividing the annual rate of inflation by the number "70."
Suppose the money growth rate is 3 percent, velocity is constant, and price level is growing at 2 percent. What is the growth rate of real GDP?
What will be an ideal response?