When Maria Deposits $100 in Currency in Her Checkable Deposit

question 49

Multiple Choice

When Maria deposits $100 in currency in her checkable deposit at Bank of America, the immediate effect is that the quantity of M1

• A)changes, but the direction of the change depends on whether the deposit was accepted by a thrift institution or a commercial bank.
• B)increases.
• C)decreases.
• D)changes only if Bank of America does not have excess reserves.
• E)does not change.

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Definitions:

Investor's Return

The gain or loss an investor realizes on an investment, including dividends, interest, and capital gains.

Current Stock Price

The current trading price of a stock on the stock market.

Dividend Growth Rate

The percentage rate of annual growth in the dividends a company pays out to shareholders.

Annual Dividend

The total dividend payment a company distributes to its shareholders annually, typically derived from its profits.