The Difference Between M1 and M2 Is That

question 143

Multiple Choice

The difference between M1 and M2 is that:

• A)the former includes notice deposits.
• B)the latter includes personal saving deposits and non-personal notice deposits.
• C)the latter includes government bonds.
• D)the latter includes cash held by chartered banks.

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Definitions:

Internal Rate

A financial metric, often referred to as the internal rate of return (IRR), that calculates the profitability of potential investments.

Return

Total monetary flow of an asset as a fraction of its price.

Investment

The action or process of allocating resources, usually money, with the expectation of generating an income or profit.

Real Discount Rate

The rate used to discount future cash flows to their present value, adjusting for inflation.