The Liquidity Approach to Measuring the Money Supply Uses

question 38

Multiple Choice

The liquidity approach to measuring the money supply uses

• A) M1 only.
• B) near moneys only.
• C) M1 plus some highly liquid assets.
• D) M2 plus some highly liquid assets.

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Definitions:

Recognition Criteria

The conditions that must be met for a particular item to be included on the financial statements, ensuring transactions are recorded in the correct accounting period.

FASB

The Financial Accounting Standards Board, an independent nonprofit organization responsible for establishing accounting and financial reporting standards in the United States.

Recognition Criteria

The conditions that must be met for a particular item to be recognized in the financial statements, according to accounting standards.

Revenue Recognition

The accounting principle that dictates the specific conditions under which income becomes recognized as revenue in the financial statements.