If an Individual Moves Money from a Demand Deposit Account

question 36

Multiple Choice

If an individual moves money from a demand deposit account to a money market mutual fund, ________.

• A) M1+ decreases and M2 stays the same
• B) M1+ stays the same and M2+ increases
• C) M1+ stays the same and M2 stays the same
• D) M1+ decreases and M2 decreases

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Definitions:

Property, Plant

Property, Plant, and Equipment (PP&E) are long-term tangible assets used in the operation of a business and not intended for sale.

Significant Change

A major alteration or transformation in a situation, process, or condition.

Activity Depreciation Method

A method of calculating the depreciation of an asset based on its usage, activities, or units of production rather than the passage of time.

Depreciation Expense

The allocated reduction in the carrying amount of a tangible asset over its useful life, reflecting wear and tear, obsolescence, or other declines in value.