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Subject - Economics:

Macroeconomics

MCQ - 201-4211

Question:

Which of the following is true about the relationship between the M 1 and M 2 measures of money?

  1. M 1 minus M 2 equals 0.
  2. M 1 includes checking deposits, while M 2 includes checking and saving deposits.
  3. M 2 includes coin and paper money, but M 1 does not.
  4. M 1 includes checking deposits, while M 2 includes checking and saving deposits.
  5. M 1 is greater than M 2.

Correct Answer: B

Explanation:

Remember, M 2 includes M 1 but also includes less liquid forms of money like savings accounts. If you added M 1 and M 2, you would be adding M 1 twice.

Record Performance

269 MCQ for effective preparation of the test of Macroeconomics of Economics section.

Read the MCQ statement: Which of the following is true about the relationship between the M 1 and M 2 measures of money? , keenly and apply the method you have learn through the video lessons for Macroeconomics to give the answer. Record your answer and check its correct answer and video explanation for MCQ No. 201-4211.

How to Answer

Solve the question for MCQ No. and decide which option (A through D/E) is the best choice to answer the MCQ, then click/tap the blue button to view the correct answer and it explanation.

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