The nature and measurement of the money supply has become more difficult in recent years because of

Question

Quizplus · Accepted Answer

Financial innovations, such as the introduction of interest-earning checking accounts and money market mutual funds, have made it more difficult to measure the money supply as these types of accounts and funds blur the lines between money and near-money assets. Congress has not reduced the Fed's power to control the money supply, and legislation prohibiting the circulation of the dollar outside of the United States does not affect the measurement of the domestic money supply. The reduced use of pennies in transactions is insignificant in terms of measuring the money supply.

The Nature and Measurement of the Money Supply Has Become