Bob Read a Newspaper Story That Indicated a Dramatic Increase

question 185

Multiple Choice

Bob read a newspaper story that indicated a dramatic increase in money market accounts and certificates of deposit during the last three months. The story reported that all other major components of the U.S. money supply remained unchanged. Based on this information, Bob can conclude that for the past quarter:

• A) both the M-1 and M-2 money supplies were stable.
• B) the M-1 money supply has increased, but the M-2 money supply was stable.
• C) the M-2 money supply has increased, but the M-1 money supply was stable.
• D) both the M-1 and the M-2 money supplies have increased.

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Definitions:

Preferred Stockholders

Investors who own preferred shares in a company, which typically gives them priority over common stockholders in terms of dividends and assets in the event of liquidation.

Corporate Creditors

Entities or individuals that have lent money or extended credit to a corporation and have a right to be repaid.

Charter

A formal document issued by a sovereign or state outlining the rights, privileges, or authority granted to an individual, corporation, or city.

Authorized

Authorized refers to having official permission or approval for actions, operations, or status within legal or organizational frameworks.