Which of the Following Is Included in the M-2 Definition

question 91

Multiple Choice

Which of the following is included in the M-2 definition of the money supply but not the M-1 definition?

• A) Currency
• B) Checking account deposits
• C) Traveler's checks
• D) Savings account deposits

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Definitions:

Potential GDP

The maximum possible level of output an economy can achieve when it is most efficiently utilizing its resources.

Unemployment

A situation where individuals who are able and willing to work cannot find jobs, measured as a percentage of the labor force.

Expansionary Fiscal Policy

Government policy aimed at stimulating economic growth by increasing government spending, reducing taxes, or both.

Contractionary Monetary Policy

A monetary policy strategy used by central banks to reduce inflation and cool an overheating economy by increasing interest rates and reducing the supply of money.