Question: All else being equal, how would each of the following affect the demand for M1+? The demand for M2? Explain. a. The maximum number of

All else being equal, how would each of the following affect the demand for M1+? The demand for M2? Explain.
a. The maximum number of cheques per month that can be written on money market mutual funds is raised from 3 to 30.
b. Banks begin to pay interest on current accounts held by firms.
c. The stock market crashes, and further sharp declines in the market are widely feared.
d. Banks introduce overdraft protection, under which funds are automatically transferred from savings to chequing as needed to cover cheques.
e. A crackdown reduces the illegal drug trade (which is carried out largely in currency).

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