Yolanda Took $5,000 from Her Checking Account and Put the Money

question 227

Multiple Choice

Yolanda took $5,000 from her checking account and put the money in her savings account at the same bank. Based on that information, which of these is true?

• A) Both M1 and M2 were reduced by $5,000.
• B) M1 went down by $5,000, but M2 was unchanged.
• C) Neither M1 nor M2 changed because the transfer was done at the same bank.
• D) M1 and M2 both rose by $5,000.

---

Definitions:

Marginal Productivity Theory

An economic theory that suggests the value of a good or service is determined by the productive resources involved in its production, emphasizing the contribution of each unit of labor or capital.

Income Distribution

Refers to the way in which total income is shared among the members of a society.

Government Subsidy

A financial contribution provided by the government to individuals, businesses, or other organizations, aimed to support or stimulate economic activity.

Superstars Pay

Refers to the significantly high salaries or earnings of top performers or individuals in specific industries such as sports, entertainment, and business due to their exceptional skill, talent, or marketability.