Which of the Following Statements Is CORRECT

question 162

Multiple Choice

Which of the following statements is CORRECT?

• A) M2 measures assets primarily used as a medium of exchange.
• B) M2 includes M1.
• C) M1 includes assets primarily used as a means of saving.
• D) The Federal Reserve discontinued reporting on M1 and M2 because they provide little insight into the state of the economy.

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Definitions:

Variable Interest Enterprise

An entity in which an investor holds a controlling interest that is not based on a majority of voting rights.

Consolidated Financial Statements

Financial statements that combine the financial information of a parent company with its subsidiaries into one comprehensive document.

Recognizes Gain or Loss

Refers to the process of recording in the financial statements the income or expense resulting from a transaction or event.

Intercompany Transactions

Transactions that occur between two different entities within the same corporate group.