Business, 30.03.2020 17:00 emurray

Georgina Paul, a student of economics, was studying the last decade's money supply data for her country X. Georgina noticed that M2 has consistently been higher than M1 and the ratio of M1 to M2 was more or less stable at around 0.3 for most of the years. However, although the central bank of X did not conduct any expansionary monetary policy in recent times, the ratio M1:M2 increased considerably to 0.7 in the last two years. Which of the following, had it happened in the last two years, would explain this outcome? A. Foreign investment in domestic money market mutual funds increased significantly. B. A neighboring country, that was earlier using X's currency, introduced its own currency. C. With people becoming more risk-averse, investment in time deposits increased significantly. D. The central bank introduced interest rates on checking accounts which induced people to move funds from savings to checking accounts. E. The widespread use of credit cards reduced the usage of traveler's checks.

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Georgina Paul, a student of economics, was studying the last decade's money supply data for her coun...