ECONOMICS (CBSE/UGC NET)

ECONOMICS

MONEY

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

As a measure of money, which of the following is NOT included in M2?

A	Foreign Deposits
B	Stocks and Bonds
C	Traveler’s Checks
D	Demand Deposit Accounts

Explanation:

Detailed explanation-1: -Retirement account balances and time deposits above $100, 000 are omitted from M2.

Detailed explanation-2: -Answer and Explanation: The correct answer is (E) Credit cards.

Detailed explanation-3: -M2 consists of M1 plus (1) small-denomination time deposits (time deposits in amounts of less than $100, 000) less individual retirement account (IRA) and Keogh balances at depository institutions; and (2) balances in retail money market funds (MMFs) less IRA and Keogh balances at MMFs.

Detailed explanation-4: -Answer and Explanation: The answer is d) Credit card balances. In macroeconomics, as measures of amount of money flowing in an economy, M1 and M2 include currency, deposits, and some other categories.

Detailed explanation-5: -What types of money are included in the M2 category? currency, saving accounts, and checking accounts.

There is 1 question to complete.