Suppose That You Decide That You No Longer Want to Hold

question 227

Essay

Suppose that you decide that you no longer want to hold currency,and deposit all of your currency holdings to your checking account.What is the immediate or initial impact of this transaction on M1 and M2?

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Definitions:

Units of Utility

A measure of satisfaction or pleasure that a consumer receives from consuming a product or service.

Utility

In economics, a measure of satisfaction or happiness that a consumer derives from the consumption of goods and services.

Satisfaction

The fulfillment of one's needs or the pleasure derived from consuming goods or services.

Consuming It

Pertains to the act of using up resources or products to satisfy needs or desires.