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In Defining the Money Supply as M2,on What Grounds Do

Question 21

Multiple Choice

In defining the money supply as M2,on what grounds do economists include savings deposits?


A) on the grounds that savings deposits are liabilities of chartered banks, whereas chequable deposits are assets of the banks
B) on the grounds that savings deposits are a form of investment and thus a better store of value than currency
C) on the grounds that savings deposits can be used as a means of payment
D) on the grounds that the purchasing power of savings deposits is much more stable than that of demand deposits and currency

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