CFA Practice Question

CFA Practice Question

Comparison of money supply across time is becoming increasingly problematic due to all of the following EXCEPT,
A. regulatory changes that attracted funds to demand deposits due to their ability to pay interest.
B. increased dollar holdings outside the US that affect measurement of M2.
C. debit cards and electronic transactions which reduce the need for cash and currency.
Explanation: Currency and cash form a much smaller part of M2 and increased holdings of both outside the U.S. has little impact on M2. The former impact M1 to a greater extent.

User Contributed Comments 2

User Comment
pstebelp We can measure money in off shore bank accounts easily?
Friso pstebelp: why don't you give the Swiss a call and ask for all the dollars in their banks? I think that answers your question, right? :)
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