Re: [ vuZs.net ] IDEA SOLUTION OF MGT411 2 GDB

On Sat, Jun 11, 2011 at 8:23 PM, mc100400462 Rabia Naz
<mc100400462@vu.edu.pk> wrote:
> plzzzzzzzzzzzzzzzzzzzzzzzzzzz snd .thanks
>
> On Sat, Jun 11, 2011 at 7:55 PM, mc100403793 Amina Nawaz
> <mc100403793@vu.edu.pk> wrote:
>>
>> PLZ SOMEONE GIVE IDEA SOLUTION OF 2ND GDB OF MGT411
>>
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Question
Money Aggregate or money supply plays a crucial role in any economy,
which not only
counts the money supply at specific time period but also useful in
taking different
economic decisions. Definitions of different money aggregate are somehow loosely
defined but all the economists differentiate and classify M1, M2 & M3
on the single
Accepted base.
Give answer in keywords only:
Q#1.What is the main characteristic that distinguishes the different money
aggregate definitions?
Solution:
The main characteristic that distinguishes the different money
aggregate definitions is
Liquidity.
2. Which money aggregate definition is mostly used in economic
decision around the
world?
Solution:
M2 is used in economic decisions.
3. Justify answer given against part-b. (Provide only one reason)
Solution:
Economists use M2 when they want to quantify the amount of money in
circulation and
try to explain different economic monetary conditions. M2 is a key
economic indicator
used to forecast inflation.

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