As of December 2010, the Largest Single Component of M₁

question 142

Multiple Choice

As of December 2010, the largest single component of M₁ consists of

• A) checkable deposits at banks.
• B) money market mutual funds.
• C) savings deposits.
• D) currency.

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Definitions:

Opportunity Costs

The loss of potential gain from other alternatives when one alternative is chosen, representing the benefits one misses out on when making a decision.

Excess Capacity

Excess capacity refers to a situation where a company is operating below its maximum output level, indicating that it can produce more with the current resources if there is higher demand.

Expansionary Fiscal Policy

To fight recessions, the federal government lowers taxes and/or raises spending.

Government Spending

Expenditures made by the government of a country on collective needs and wants such as infrastructure, public safety, education, and healthcare.