The Demand for Money (M2) Remained Relatively Stable from the 1960s

question 6

Multiple Choice

The demand for money (M2) remained relatively stable from the 1960s through the early 1990s since, over this time period,

• A)the income elasticity of demand for M2 was close to 0
• B)yields on M2 assets rose more than proportionally with interest rates on money market instruments
• C)the opportunity cost of holding M2 assets changed very little
• D)the money demand function for M1 was also very stable
• E)all of the above

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Definitions:

Passive Listening

Hearing what a person has to say without responding in any way; contrast with active listening.

Anxious Feeling

A state of worry, nervousness, or unease about something with an uncertain outcome.

Open Posture

A position that conveys a feeling of receptiveness and friendliness; facing another person with arms comfortably at the sides or in the lap.

Body Language

Non-verbal communication, including facial expressions, eye contact, posture, touch, and attention to personal space.