With the Invention of ATM Machines,the Public Now Holds Less

question 39

Multiple Choice

With the invention of ATM machines,the public now holds less currency.As a result,we would expect to have seen

• A)both the M1 and the M2 multipliers to increase over time.
• B)the M1 multiplier to increase while the M2 multiplier to decrease over time.
• C)the M1 multiplier to decrease while the M2 multiplier to increase over time.
• D)None of the above

---

Definitions:

Incentive Problem

A situation where the motivations of individuals or groups do not align with broader goals or desired outcomes, often leading to inefficiency or conflict.

Communist Central Planning

A system where the government makes all decisions about the production and allocation of goods and services in an economy.

Personal Gain

The benefit or advantage one receives or aims to receive from an action or investment, often measured in terms of financial or personal satisfaction.

Market System

A system of economics where the choices about investment, production, and distribution rely on the principles of supply and demand, and the pricing of goods and services is established freely in the market.