One reason the Fed defines so many measures of money is that economists have different opinions as to which measure is most consistently related to spending and other economic activity.

Question

Quizplus · Accepted Answer

This is correct, as different measures of money reflect different types of accounts and financial instruments, and economists may disagree on which measure is the most useful in predicting economic outcomes. Therefore, the Fed tracks and reports a variety of money measures to provide a more complete picture of the money supply and its relationship to economic activity.

One Reason the Fed Defines So Many Measures of Money