For each of the following transactions, what is the initial effect (increase or decrease) on M1? On

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For each of the following transactions, what is the initial effect (increase or decrease) on M1? On M2? On M2+?

a. You sell a few shares of stock and put the proceeds into your savings account in a chartered bank.

b. You sell a few shares of stock and put the proceeds into your chequing account in a chartered bank.

c. You transfer money from your savings account to your chequing account in a chartered bank.

d. You discover $0.25 under the floor mat in your car and deposit it in your chequing account.

e. You discover $0.25 under the floor mat in your car and deposit it in your savings account in a credit union.

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Macroeconomics

ISBN: 978-1319120054

3rd Canadian edition

Authors: Paul Krugman, Robin Wells, Iris Au, Jack Parkinson

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