M1 Differs from M2 in That

question 1

Multiple Choice

M1 differs from M2 in that

• A) M1 includes currency and balances held in chequing accounts,which are not included in M2.
• B) M2 includes personal deposits and non-personal demand and notice deposits,which are not included in M1.
• C) M2 includes small savings accounts,and money market mutual funds,which are not included in M1.
• D) M1 is a broader measure of the money supply than M2.
• E) the assets in M2 are more liquid than the assets in M1.

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Definitions:

Additional Benefits

The perks or supplementary advantages that come in addition to the primary benefits of a product, service, or policy.

Marginal Analysis

Marginal Analysis is an examination of the additional benefits of an activity compared to the additional costs incurred by that same activity.

Relevant Costs

Only those costs that will be affected by a decision or action and therefore should be considered in decision-making.

Activity

In economic terms, refers to actions or engagements, such as production or consumption, within an economy.