When M1 Is Expanded to M2, the Money Supply

question 68

Multiple Choice

When M1 is expanded to M2, the money supply:

• A) almost doubles.
• B) more than triples.
• C) goes up tenfold in size.
• D) changes very little.
• E) goes up by 50 percent.

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Definitions:

Frequency Distribution

A statistical representation showing how often each different value in a set of data occurs.

Compounded Monthly

A calculation method where interest is added to the principal sum at the end of each month, and future interest is calculated on the new total.

Future Value

Also known as the compound amount, the total value of an investment; equal to the principal plus all the compound interest.

Equal Amount

A quantity that is the same in size, number, or value when compared to another.