Which of the Following Statements Is False About M1 and M2

question 98

Multiple Choice

Which of the following statements is false about M1 and M2?

• A) M2 is a broader measure of the money supply than M1.
• B) M2 contains assets that are less liquid than those in M1.
• C) All the assets included in M1 are also included in M2.
• D) All the assets included in M2 are also included in M1.

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Definitions:

Debt/Equity Ratio

Debt/Equity Ratio is a financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets.

Compromise Policy

A strategy or approach that involves making concessions or finding a middle ground between different opinions or objectives in decision-making processes.

Cash Dividend

A distribution of a company's earnings to shareholders in the form of cash, indicating the company's underlying profitability and cash flow health.

Flotation Costs

Costs that a company faces when it issues new securities, consisting of fees for underwriting, legal services, and registration.