How Are Demand Deposits Treated in M1 as Compared to M2

question 105

Multiple Choice

How are demand deposits treated in M1 as compared to M2?

• A)They are included in M1 but not M2.
• B)They are included in M2 but not M1.
• C)They are included in M1 and M2.
• D)They are included in neither M1 nor M2.

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Definitions:

Comparative Advantage

The capacity of a person or a collective to perform a specific economic function more effectively than another function.

Specialization

The practice of focusing resources on the production of particular goods or services for which a person or entity has a competitive advantage.

Comparative Advantage

The ability of an individual or country to produce a particular good at a lower opportunity cost than another.

Absolute Advantage

The ability of a party to produce a greater quantity of a good, product, or service than competitors, using the same amount of resources.