Which of the Following Is True of M1 and M2

question 42

Multiple Choice

Which of the following is true of M1 and M2?

• A)M1 is nearly three times as large as M2.
• B)M2 is made up mostly of demand and checkable deposits.
• C)M2 is substantially larger than M1.
• D)M2 consists of M1 and savings deposits only.
• E)M1 is made up of M2 and certificates of deposit only.

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Definitions:

Financial Statement

Documents that present the financial activities and condition of a business, including the balance sheet, income statement, and cash flow statement.

Balance Sheet

An accounting document detailing a firm's resources, debts, and equity held by shareholders, capturing its financial status at a particular instant.

Income Statement

a financial statement that summarizes a company's revenues, expenses, and profits over a specific period of time.

Cash Flows

The aggregate volume of funds moving into and out of a corporation, impacting its ability to cover short-term obligations.