5 6 7 Which of the following statements most accurately describes the measurements of the money supply known as M1 and M2? a. b. C. d. M1 was a measure of the money supply that worked until about the 1990s; then M2 became a more accurate measure and is still in use today. M1 is a measure of currency and coins, while M2 is a measure currency, coins, and banking deposits. Neither M1 nor M2 worked very well in measuring the total money supply in circulation. MI is a component of M2. Which of the following are included in the M1 definition of the money supply? a. b. C. d. Currency, checkable deposits, and money market accounts Time deposits and currency Currency, demand deposits, and other checkable deposits Currency and money market deposit accounts Liquidity is the term that has which of these meanings? a. b. C. d. A measure of the ease with which one asset can be converted into another asset, usually money A measure of the ease with which one can use money to purchase goods A measure of the ease with which one can borrow money A measure of the ease in which one can get out of debt to become a lender