The Reason Why Many Economists Switched from Using M1 to M2

question 33

Multiple Choice

The reason why many economists switched from using M1 to M2 as the best measure of the medium of exchange is that

• A)during the 1980s, new substitutes for checking accounts appeared and were included in M2.
• B)during the 1980s, the country went off the gold standard and began using fiat money for the first time.
• C)during the 1980s, inflation roared out of control and a better measure of the money supply seemed necessary.
• D)in 1982, the federal government ordered that all income taxes must be paid using M2.

---

Definitions:

Motor Cortex

The cerebral cortex region tasked with the planning, controlling, and performance of voluntary actions.

Foerster and Penfield

Pioneers in neurosurgery and neuroscience, known for their contributions to brain mapping and epileptic surgery techniques.

Fritsch and Hitzig

Pioneers in neurophysiology, known for their research demonstrating that electrical stimulation of certain parts of the dog's brain resulted in muscular contractions on the opposite side of the body.

Auditory Stimulation

The process of inducing a response through exposure to sound, affecting perception, emotions, or cognitive functions.