M1 Has Decreased in Its Usefulness in Understanding Inflation Due

question 24

Multiple Choice

M1 has decreased in its usefulness in understanding inflation due to:

• A)The increased use of checks in the economy
• B)The introduction of money market mutual fund shares and similar checking substitutes
• C)More reliance on the use of currency
• D)The increased use of electronic payments

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Definitions:

Supply Curve

An illustrated depiction that maps out the connection between a product's price and the volume of the product that providers are ready to sell.

Supply

The total amount of a product or service that is available for consumers.

Demand

The quantity of a product or service that consumers are willing and able to buy at various prices during a certain period.

Competitive Market

A market structure characterized by a large number of buyers and sellers, homogeneous products, and ease of entry and exit, which leads to price tending towards marginal cost.