Why Has the Distinction Between M1 and M2 Been Blurred

question 19

Multiple Choice

Why has the distinction between M1 and M2 been blurred over time?  

• A) M1 is now larger than M2. 
• B) Depositors can transfer funds between accounts so easily. 
• C) M1 is becoming less liquid. 
• D) Banks are offering time deposits.

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Definitions:

Profits and Losses

It refers to the financial result of a company's operations, indicating the difference between its revenues and expenses.

Billable Hours

The amount of time spent on specific tasks or projects that can be charged to clients, typically used in professional services firms.

Capital Accounts

Accounts that represent the initial and subsequent investments of owners in a business, adjusted for any profits or losses.

Profit Sharing

A company policy of distributing a portion of net profits to its employees as a form of bonus or additional compensation.