If you take $500 out of a savings deposit and put it into a checking account, the immediate effect (do not consider the money multiplier):
a. M1 rises, M2 remains the same, and the monetary base remains the same.
b. M1 falls, M2 falls, and the monetary base remains the same.
c. M1 rises, M2 rises, and the monetary base remains the same.
d. M1, M2, and the monetary base rise.
e. M1, M2, and the monetary base remain the same.
.A
You might also like to view...
The reduction in private borrowing that is caused by an increase in government borrowing is called:
A. the crowding out effect. B. surplus investment. C. the dissaving effect. D. the savings effect.
Suppose that when price is $10, quantity supplied is 20 . When price is $6, quantity supplied is 12 . The price elasticity of supply is
a. 0.2 b. 0.5 c. 1.0 d. 1.5 e. 2.0
Which of the following statements about waste disposal is not true?
A. Raw material that has been used must be recycled or disposed. B. The physical law of conservation of matter dictates that objects like petroleum can be transformed, but cannot simply vanish. C. The simplest way of dealing with waste is through incineration. D. The amount of recycling in the United States and European Union has risen over time.
A major purpose of usury laws is to make more funds available to low-income borrowers. Economic analysis suggests that usury laws:
A. are effective in achieving this goal. B. allocate available funds to high-income borrowers. C. have no impact on the allocation of funds between high-income and low-income people. D. help low-income people only when the legal interest rate is above the market rate.