Rick withdraws $500 from his savings account, keeps $100 as currency, and deposits $400 in his checking

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Rick withdraws $500 from his savings account, keeps $100 as currency, and deposits $400 in his checking account.

A. M1 increases by $400 and M2 decreases by $500.

B. M1 does not change, but M2 decreases by $500.

C. M1 does not change, but M2 decreases by $400.

D. M1 increases by $500 and M2 does not change.

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Foundations of Macroeconomics

ISBN: 978-0134492001

8th edition

Authors: Robin Bade, Michael Parkin

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Question Posted: May 21, 2018 06:25 AM

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Rick withdraws $500 from his savings account, keeps $100 as currency, and deposits $400 in his checking

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Answer D When the 500 was in the savings accoun...View the full answer

Foundations of Macroeconomics

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