The M2 Definition of the Money Supply Is Based on the Concept

question 22

Multiple Choice

The M2 definition of the money supply is based on the concept that

• A) M₁ is a small number, and should be increased in size.
• B) many types of deposits can be used as both payments and stores of value.
• C) checking deposits are used for payments, and therefore, not part of M₁.
• D) cash is not used for the majority of payments.

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Definitions:

Phi Phenomenon

A perceptual illusion in which stationary objects shown in rapid succession, such as lights flashing at certain speeds, appear to be moving.

Recency Effect

Recency effect is a memory phenomenon where individuals are more likely to recall the last items in a series better than those in the middle or the beginning.

Student Performance

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Teachers' Expectations

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