Question: 3. For each of the situations below determine whether the money supply will increase, decrease, or stay the same. (a)An individual deposit $100 of cash

3. For each of the situations below determine whether the money supply will increase, decrease, or stay the same.

(a)An individual deposit $100 of cash into a savings account.

(b)The bank makes a $10,000 loan to an individual for the purchase of a used car.

(c)A commercial bank sells government bonds to the public.

Answer below:

(a)

(b)

(c)

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