Which of the following statements about M1 and M2 is not true?
A. M2 is larger than M1.
B. M2 is more liquid than M1.
C. Transaction accounts are part of M2.
D. Transaction accounts are part of M1.
Answer: B
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The law of large numbers allows insurance companies to
A) hold capital market instruments as assets without fearing overly large numbers of defaults. B) hold money market instruments as assets without fearing overly large numbers of defaults. C) predict the average number of occurrences of insurable events in a large population of policyholders. D) charge higher premiums than necessary, knowing that large numbers of individuals will pay them.
When the elasticity of demand for a particular good is between zero and -1, _____
a. demand is elastic b. demand is inelastic c. demand is unit-elastic d. the good is an inferior good e. the good is a normal good
List and define any two of the costs of high inflation
An economic expansion in the United States ________ the demand for exports from Mexico resulting in an increase in Mexican autonomous expenditures and a(n) ________ output gap in Mexico.
A. reduces; expansionary B. increases; recessionary C. increases; expansionary D. reduces; recessionary