What measure of the money supply is most often used by businesses and governments for economic planning?
A) M-2
B) Currency
C) Demand deposits
D) Liquidity
E) M-1
Answer: A
Explanation: A) M-2, a second measure of the money supply, is often used for economic planning by businesses and government agencies. M-2 includes everything in M-1 plus other forms of money that are not quite as liquid, for example, short-term investments that are easily converted to spendable forms including time deposits, money market mutual funds, and savings accounts.
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