Which of the Following Statements Best Summarizes the Difference Between

question 119

Multiple Choice

Which of the following statements best summarizes the difference between M-1 and M-2?

• A) The M-1 definition of the money supply includes only domestic currencies while the M-2 definition includes foreign currencies.
• B) The M-1 definition consists of hard currencies which are backed by gold and silver, while M-2 consists of soft currencies which are not backed by gold and silver.
• C) The M-2 definition includes everything in the M-1 definition, plus additional components such as money in savings accounts, money market accounts, and certificates of deposit.
• D) The M-1 money supply consists only of the currency (coins and paper money) that circulates in our economy, while the M-2 includes traveler's checks and funds in demand deposits.

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Definitions:

Charged Species

Ions or molecules that have an electric charge, either positive (cation) or negative (anion).

Stabilization

The process of making a compound, mixture, or structure more stable or resistant to change, often through chemical reactions or physical processes.

Most Acidic

Describes the substance with the highest acidity in a given context, typically having the lowest pH or greatest ability to donate a proton (H+ ion).

Proton

A subatomic particle found in the nucleus of an atom, possessing a positive electrical charge.