The Federal Reserve uses two definitions of the money supply, M1 and M2, because
A. M2 satisfies the medium of exchange function of money, whereas M1 satisfies the store of value function
B. M2 is a narrow definition focusing more on Liquidy, whereas M1 is a broader definition of the money supply
C. M1 is a narrow definition focusing more on liquidy, whereas M2 is a broader definition of the money supply
Ans: C. M1 is a narrow definition focusing more on liquidy, whereas M2 is a broader definition of the money supply
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