In the United States over the last decade,the velocity of
A)M1 has been more stable than the velocity of M2,possibly because of the deregulation of the interest paid on checkable deposits
B)M1 has been more stable than the velocity of M2,leading the Fed to rely more on M1 targets
C)M2 has been more stable than the velocity of M1,but the Fed still relies on M1 targets
D)M2 has been more stable than the velocity of M1,possibly because of the deregulation of the interest paid on checkable deposits
E)both c and d are true

Question

Quizplus · Accepted Answer

According to the context, the velocity of M2 has been more stable than the velocity of M1 over the last decade in the United States, possibly because of the deregulation of the interest paid on checkable deposits. Therefore, choice D is the correct answer. Choice A is incorrect because it suggests that the stability of M1 velocity has to do with deregulation, which is not supported by the passage. Choice B is incorrect because it suggests that M1 velocity is more stable than M2 velocity, which is the opposite of what is stated in the passage. Choice C is also incorrect because it suggests that the Fed relies on M1 targets despite the stability of M2 velocity, which is not stated in the passage. Choice E is incorrect because only option D is true according to the passage.

In the United States Over the Last Decade,the Velocity of