The liquidity approach to measuring money defines the M2 money supply as A. near monies. B. currency plus travelers checks and checkable deposits. C. M1 plus near monies. D. M1 plus near monies, large time deposits and repurchase agreements.

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Lydon

24 November, 07:12

The liquidity approach to measuring money defines the M2 money supply as A. near monies. B. currency plus travelers checks and checkable deposits. C. M1 plus near monies. D. M1 plus near monies, large time deposits and repurchase agreements.

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Answers (1)

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Ruth Daugherty · Answer 1

The correct answer is C. M1 plus near monies.

Explanation:

The liquidity approach emphasizes the role of money as a store of value and downplays the role it plays as a means of payment. To assess the amount of money emphasizes that the essentially distinctive property of money is that it is the most liquid of assets.

The strict money supply or circulating medium (M1), which defines money as the money in the hands of the public and demand deposits (DV) is the usual most accepted formula as money. Therefore, money in the strict sense is listed as such in the monetary statistics of the International Monetary Fund (IMF) and many other financial institutions around the world.