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

question 129

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.

---

Definitions:

Metabolic Tolerance

The body's adjustment to a substance through the increase of metabolic processes, reducing the substance's effectiveness over time.

Cellular Tolerance

A cellular adaptation in which the response to a substance decreases after repeated exposure, often seen with drugs or toxins.

Hippocampus

A region of the brain crucial for the formation of new memories and spatial navigation.

Amygdala

An almond-shaped section of nervous tissue located in the temporal (side) lobe of the brain; involved in emotions such as fear and pleasure.