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9 March, 08:15

Which of the following is not a correct statement about M2? A. M2 is a broader definition of money compared to M1 and currency. B. M2 includes savings accounts, small-denomination time deposits, and money market mutual funds. C. M2 includes all of the assets in M1. D. M2 is the best definition of money as a medium of exchange.

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  1. 9 March, 11:17
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    D) M2 is the best definition of money as a medium of exchange.

    Explanation:

    M2 includes all M1 plus some broader types of money which represent near money such as savings accounts, money market securities, mutual funds, small denomination time deposits (CDs worth less than $100,000). These are classified as ear money because they can be easily and quickly converted into currency (cash) or checking account deposits.
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