What is the difference between the M1 and M2 definitions of the money supply?
What will be an ideal response?
Both M1 and M2 are definitions of the economy’s money supply. M1 is the definition of the money supply with the highest degree of liquidity, the money supply used mainly for transactions purposes. M1 consists of currency (coins and paper money) and check able deposits. M2 consists of everything in M1 plus savings deposits, including money-market deposit accounts, small time deposits, and money-market mutual fund balances held by individuals.
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If the economy enters an expansion
A) cyclical unemployment increases. B) structural unemployment increases. C) cyclical unemployment decreases. D) structural unemployment decreases.
Real per capital GDP in the United States is:
A. over 30 times what it was a century ago. B. about the same as it was a century ago. C. over three times what it was a century ago. D. over seven times what it was a century ago.