The Main Advantage of Using M2 Instead of M1 as the Measure

question 78

Multiple Choice

The main advantage of using M2 instead of M1 as the measure for money is that

• A) M2 can be measured more accurately.
• B) M2 includes only instantly accessible assets.
• C) M2 is sometimes more stable.
• D) M2 varies as the interest rate varies.

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Definitions:

Outstanding Check

A check that has been written and issued but not yet cashed or cleared by the bank.

Service Charge

A charge imposed to cover expenses associated with the main product or service being acquired.

Adjusted Cash Balance

The cash amount shown on a company's books after adjustments have been made for checks written or deposits in transit.

Check Register

A record kept by an account holder of checks written and deposits made into their checking account.