Question

Which of the following will be affected if consumers take money out of checking accounts to pay their credit cards?A. M1B. M2C. M3D. M4

Answer 1

Answer:

B. M2

Explanation:

M2 refers to a measure of the total supply of money, which includes money at bank and cash. Thus, M2 will be affected if consumers take money out of a checking accounts to pay their credit cards.