Which of the Following Statements Is False About M1 and M2

question 98

Multiple Choice

Which of the following statements is false about M1 and M2?

• A) M2 is a broader measure of the money supply than M1.
• B) M2 contains assets that are less liquid than those in M1.
• C) All the assets included in M1 are also included in M2.
• D) All the assets included in M2 are also included in M1.

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Definitions:

Perfectly Inelastic

A demand situation where the quantity demanded does not change regardless of the price level.

Excise Tax

is a tax directly levied on certain goods, services, or activities, often with the intent to reduce their consumption or generate revenue.

Market Price

The current price at which a good or service can be bought or sold in a given market, reflecting supply and demand dynamics.

Tax Revenue

The wealth gathered by governments by imposing taxes.