Question: If you withdraw $100 from your checking account and put it in your wallet, a. M1 decreases by $100. b. M2 increases by $100. c.

If you withdraw $100 from your checking account and put it in your wallet,

a. M1 decreases by $100.

b. M2 increases by $100.

c. M1 decreases by $100 and M2 increases by $100.

d. M2 decreases by $100 and M1 increases by $100.

e. there is no immediate change in the money supply.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Q:

Question 6 (Worth 3 points) if you withdraw $100 from your checking account and put it in your wallet, M1 decreases by $100. M2 increases by $100. M1 decreases by $100 and M2 increases by $100. M2...

Q:

Suppose you withdraw $ 1 0 0 from your checking account. What impact would this action alone have on the following? The Money Supply? M 1 increases by $ 1 0 0 M 1 and M 2 decrease by $ 1 0 0 M 1...

Q:

Multiple Choice Question 1) The statement, "My iPhone is worth $700" represents money's function as A) a medium of exchange. B) a unit of account. C) a store of value. D) a standard of deferred...

Q:

Rick withdraws $ 5 0 0 from his savings account, keeps $ 1 0 0 as currency, and deposits $ 4 0 0 in his checking account. Question content area bottom Part 1 A . M 1 does not change, but M 2...

Q:

1) Which of the following can be described as involving direct finance? Select one: A. People buy shares of common stock in the primary markets. B. A corporation buys a short-term corporate security...

Q:

Question 29 Not yet answered Marked out of 1.00 P Flag question If you convert your checking account into a savings account O a. both M1 and M2 will decrease O b. M1 decreases while M2 increases O c...

Q:

7. Andy keeps his savings in a money Charlie keeps his in a bank. Who is using direct finance market mutual fund, Ben ineps a. Andy b. Ben C. Charlie d. all three You take $500 out of your checking...

Q:

QUESTION 1 A $100 bill in your wallet is part of a.both M1 and M2. b.only M2. c.only M1. QUESTION 2 A weak dollar will __________ net exports and shift the AD curve to the __________. a.decrease;...

Q:

Suppose you decide to withdraw $ 1 0 0 in currency from your checking account. What is the effect on M 1 ? Ignore any actions the bank may take as a result of your having withdrawn the $ 1 0 0 . A ....

Q:

Suppose you decide to withdraw $ 1 0 0 in currency from your checking account. What is the effect on M 1 ? lgnore any actions the bank may take as a result of your having withdrawn the $ 1 0 0 . A ....

Q:

11. Paradoxically, smartphones leave us feeling less rather than more connected to others. Do you agree? Why or why not?

Q:

A. Judaism, Christianity and Islam are all religions with a sacred book. Describe the contents of the Hebrew Bible, New Testament, and Quran and the processes that led to their canonization. In what...

Q:

Consider the CAPM. The expected return on the market is 1 3 % . The expected return is the risk - free rate? 9 % 1 1 % 3 % 7 %

Q:

Calculate the future value of an ordinary general annuity, given periodic payments of $1,200, payments made every 3 months, with a term of 13 years and 3 months, and with an interest rate of 3.25%...

Q:

=+16 times income per worker in Poorland. Can you explain this fact by changing the value of the parameter ? What must it be? Can you think of any way of justifying such a

Q:

=+c. If the CobbDouglas parameter takes the conventional value of about 1/3, how much higher should income per worker be in Richland compared to Poorland?

Q:

=+a less educated labor force. Assume that education affects only the level of the effi ciency of labor. Also assume that the countries are otherwise the same: they have the same saving rate, the...