The Main Advantage of Using M2 Instead of M1 as the Measure

question 78

Multiple Choice

The main advantage of using M2 instead of M1 as the measure for money is that

• A) M2 can be measured more accurately.
• B) M2 includes only instantly accessible assets.
• C) M2 is sometimes more stable.
• D) M2 varies as the interest rate varies.

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Definitions:

Total Variable Cost

The sum of all costs that vary with output level, including costs such as labor and materials.

Shut Down

This term refers to a short-term decision made by a firm to cease operations when the market price falls below the minimum average variable cost.

Scale of Production

Refers to the level at which production activities are aggregated or expanded, affecting the unit costs and capability of the production process.

Lower

To decrease in position, value, or condition.