Other Things Constant, Which of the Following Would Cause the M2

question 188

Multiple Choice

Other things constant, which of the following would cause the M2 money supply to decline?

• A) an increase in the quantity of U.S. currency held overseas
• B) a shift of funds from interest-earning checking accounts to money market mutual funds
• C) a reduction in the general public's holdings of currency outside of banks because debit cards have become more popular and widely accepted
• D) a shift of funds from money market mutual funds into stock and bond mutual funds because the fees to invest in the latter have declined

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Definitions:

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with the unconditioned stimulus, eventually comes to trigger a conditioned response.

Operant Conditioning

An educational method where the intensity of an action is altered by either reinforcement or punishment.

Observational Learning

The process by which individuals learn new behaviors or information by watching others, also known as modeling.

Situational Type Phobia

A type of anxiety disorder characterized by an irrational fear of specific situations, such as public speaking or flying.