Author Question: Distinguish M1 from M2. What will be an ideal response?[br][br][b][color=black]Question ... (Read 31 times)

09madisonrousseau09 · **on:** Jun 30, 2018

Distinguish M1 from M2.

What will be an ideal response?

Question 2

In the above figure, starting at E3, if there is an increase in technology that causes a permanent increase in production capabilities

A) aggregate supply would shift to SRAS0 and LRAS1 would shift to LRAS0.
B) aggregate supply would shift to SRAS2 and LRAS0 would shift to LRAS1.
C) aggregate supply would shift to SRAS1 and LRAS0 would shift to LRAS1.
D) aggregate supply would shift to SRAS1 and then return to SRAS0.

fwbard · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

M2 is a broader definition of money that includes assets that are less likely to be used in economic exchanges. M2 includes all the assets in M1 but also includes savings and loan deposits and money market mutual funds.

Answer to Question 2

A