Which of These Would Increase M1 in the Country Where

question 114

Multiple Choice

Which of these would increase M1 in the country where Joe, Nan, and the Hardware Store are located?

• A) Joe withdraws $500 from his checking account and deposits it in his savings account.
• B) Joe withdraws $500 from his checking account and gives it to his sister Nan, who deposits it in her checking account.
• C) Joe withdraws $500 from his savings account and deposits it in his checking account.
• D) Joe spends $500 cash at the Hardware Store, and the store deposits the $500 in its checking account.

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Definitions:

Incremental

Describes small, gradual changes or increases made over a period of time.

Economic Information

Data related to the production, distribution, and consumption of goods and services that informs decision-making.

Acquire

To obtain ownership of something, such as a company purchasing another company or an individual acquiring an asset.

Self-Interest

The pursuit of personal gain or advantage, which is a fundamental economic assumption about human behavior.