Describe the Difference Between the M1 and M2 Measures of the Money

question 36

Essay

Describe the difference between the M1 and M2 measures of the money supply. Include references to the function of money as it is emphasized in each of these two measures of the money supply.

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Definitions:

Expense Accounts

These accounts record the consumption of assets or services that occur during the operation of a business, leading to a decrease in owner's equity.

Revenue Accounts

Accounts in the general ledger that track the income generated by a company from its normal business operations.

Gain On Sale

The profit realized when a capital asset is sold for a higher price than its purchase price.

Property And Equipment

Tangible assets owned by a business for use in the production or supply of goods and services or for rental to others.