The Distinction Between M1 and M2 Has Blurred Over Time

question 115

Multiple Choice

The distinction between M1 and M2 has blurred over time because:

• A)M1 is now larger than M2.
• B)depositors can transfer funds between accounts easily.
• C)the Federal Reserve has defined them less precisely.
• D)M1 is becoming less liquid.
• E)banks are now offering time deposits.

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Definitions:

Mode

Most frequently occurring score or value of a variable in a set of data.

Range

The difference between the highest and lowest values in a data set, indicating the span of data points.

Standard Deviation

A measure of the dispersion or variability within a set of numerical data, indicating how spread out the values are from the mean.

Variance

A statistical measure of the dispersion representing how much the data points in a data set diverge from the mean value.