Which of the following does not belong in the M2 category?

Factors that led to worsening financial market conditions in East Asia in 1997-1998 include

A) weak supervision by bank regulators. B) a rise in interest rates abroad. C) unanticipated increases in the price level. D) increased uncertainty from political shocks.

The reason externalities distort the allocation of resources is that:

a. too few goods are usually produced. b. firms often go out of business because of the externality. c. a firm's private costs do not reflect the social cost of production. d. regulating externalities uses scarce resources.