Bob read a newspaper story that indicated a dramatic increase in money market accounts and certificates of deposit during the last three months. The story reported that all other major components of the U.S. money supply remained unchanged. Based on this information, Bob can conclude that for the past quarter:

Question

Quizplus · Accepted Answer

The increase in money market accounts and certificates of deposit suggests a shift towards more liquid, easily accessible forms of saving, which falls under M-2. Since all other major components remained unchanged, it can be inferred that M-1, which includes currency and checking account deposits, was stable. Therefore, the correct answer is C.

Bob Read a Newspaper Story That Indicated a Dramatic Increase