$17$

Multiple Choice

$1$ point

Benjamina Franklin has had $$10,000$ in cash sitting at home for the past few months. She decides to deposit $$7,000$ into her bank savings account, so it can earn some interest. How will Benjamina's action affect the money supply?

Benjamina's action will not, by itself, change the money supply.

The money supply will rise by $$7,000,$ because that amount just entered the banking system.

The money supply will fall by $$7,000,$ because the amount of currency held by households just fell by $$7,000.$

The money supply will fall by $$10,000,$ because that is the total amount Benjamina is no longer keeping as a reserve.

The money supply will rise by $$10,000,$ because that is the total amount that is no longer kept out of the banking system.