Changes in Monetary Aggregates Such as M2 and M2+ Can

question 37

Multiple Choice

Changes in monetary aggregates such as M2 and M2+ can be a poor guide to the stance of monetary policy if

• A)commercial bank reserves are rising.
• B)interest rates are changing rapidly.
• C)interest rates are constant.
• D)money demand is changing in unpredictable ways.
• E)money demand is constant.

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Definitions:

Write Off

The act of removing an asset from the financial statements due to its impairment or irrelevance, recognizing it as a loss.

Estimated Bad Debts

An account on the financial statements estimating the amount of receivables that a company does not expect to collect.

Percentage of Sales Method

An accounting technique used to estimate bad debts or the allowance for doubtful accounts based on a predetermined percentage of sales.

Current Revenues

Income generated from the normal business operations within the current accounting period.