Why Has M2 Grown More Quickly Than M1 in Recent

question 55

Multiple Choice

Why has M2 grown more quickly than M1 in recent decades?

• A) Currency in circulation has declined.
• B) People own more shares of stock than in the past.
• C) The amount of funds in CDs and money market mutual funds shares has grown faster than currency or checking deposits.
• D) Most people use debit cards instead of checking accounts.

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Definitions:

Theory of Mind

The capacity to recognize and understand thoughts, feelings, desires, and intentions in oneself and others, while also grasping that others may hold beliefs, desires, and intentions that diverge from one's personal ones.

Egocentrism

The inability to understand or assume any perspective other than one's own.

Habituation Technique

A method used to reduce reactions to repeated stimuli by exposing the subject to the stimulus over time until the response diminishes.

Object Permanence

The understanding that objects continue to exist even when they cannot be observed (seen, heard, touched, smelled or sensed in any way).