Statement 1 : The central bank controls M1, M2 and M3 in the long run while in the short run money multiplier is influenced by behavioural coefficients (income, wealth etc).
Statement 2 : By focussing on the behavioural coefficients, money supply theory regards money creation in a static rather than a dynamic economic setting.
Choose the correct answer from the options given :
1
Both Statement 1 and 2 are true
2
Both Statement 1 and 2 are false
3
Statement 1 is true and Statement 2 is false
4
Statement 1 is false and Statement 2 is true