Due to New Methods of Electronically Transferring Assets from Savings

question 182

Multiple Choice

Due to new methods of electronically transferring assets from savings accounts to checking accounts, many economists favor moving savings accounts from

• A) M₁ into M2.
• B) M2 into M3.
• C) M3 into M2.
• D) M2 into M₁.

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Definitions:

Open Market Committee

A committee within a central bank, like the Federal Reserve in the United States, that makes key decisions about interest rates and the growth of the United States money supply.

Federal Reserve System

The central banking system of the United States, responsible for monetary policy, regulation of financial institutions, and management of the country's money supply.

Required Reserves

The minimum amount of reserves a bank is required to hold by central bank regulation, aimed at ensuring the bank's liquidity and stability.

Excess Reserves

The surplus funds that a bank or financial institution possesses beyond the mandatory requirements set by regulatory bodies, creditors, or its own internal governance protocols.