Many Economists Believe That Savings Accounts Should Be Added to M1

question 159

Multiple Choice

Many economists believe that savings accounts should be added to M1 because they

• A) are larger in size than conventional checking accounts.
• B) pay larger interest than checking accounts.
• C) can be transferred quickly into checkable accounts.
• D) are also insured by the federal government.

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Definitions:

Equilibrium Price

The price at which the quantity of a good supplied equals the quantity demanded, resulting in market equilibrium.

Market-Determined Price

A price outcome established through the interaction of supply and demand, without external controls.

Binding Price Ceiling

A maximum legal price set below the equilibrium price, leading to shortages as demand exceeds supply.

Equilibrium Level

A situation where the balance between the market's supply and demand stabilizes prices.