M2 equals
A) M1 and is just another name for currency outside of banks.
B) M1 plus savings deposits and small time deposits minus money market fund deposits.
C) M1 plus savings deposits, small time deposits, and money market fund deposits.
D) M1 minus traveler's checks because they are not really money.
E) currency plus savings deposits, all time deposits, and money market funds and other deposits.
Question 2
Based on the model of the money market, when real income decreases, the equilibrium interest rate should
A) stay the same.
B) increase.
C) decrease.
D) increase to the same extent that the supply of money increases.
