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15 August, 08:24

What types of money are included in the M2 category? Check all that apply.

Where do banks get money to lend to borrowers?

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  1. 15 August, 08:42
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    M2 is a calculation of money supply that includes all elements of M1 (cash, checking deposits, etc) plus "near money" which includes mutual funds, savings deposits, money market securities, etc.

    Banks get money to lend through other people's deposits (minus the required reserve ration) and from interest income from other loans they make.
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