Question
If you use an online payment system such as PayPal to purchase goods or services on the Internet, does this affect the M1 money supply, the M2 money supply, both, or neither? Explain.
Step 1
The M1 money supply includes physical currency and coin, demand deposits, travelers checks, and other checkable deposits. The M2 money supply includes M1 in addition to saving deposits, certificates of deposit (less than $100,000), and money market deposits for Show more…
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