Which of the following describes the behavior of M1 in recent decades?
A) It soared during the recessions of 1990-91, 2001, and 2007-2009.
B) It tended to grow more rapidly than M2.
C) It was more stable than M2.
D) It has not declined since the 1970s.

Question

Quizplus · Accepted Answer

M1 typically increases during recessions as people and businesses hold onto cash and liquid assets, which was observed during the recessions of 1990-91, 2001, and 2007-2009.

Which of the Following Describes the Behavior of M1 in Recent