Joan Begins the Month with $100 in Her Checking Account

question 12

Multiple Choice

Joan begins the month with $100 in her checking account. When she receives a paycheck for $1,200 on the 5th of the month, she uses that paycheck to put $1,000 in her checking account, takes $80 in cash, and deposits $120 in her savings account. During the month, she spends $550 on rent and utilities, $30 on household items, $10 on a T-shirt, and $350 on food, leaving a balance of $240 in her checking account. Based on the given information, which statement is true?

• A) The $100 and the $220 in Joan's savings account are part of M1.
• B) When Joan deposits her paycheck and deposits $120 in her savings account, M1 falls by $120.
• C) Joan's deposit into her checking account increases M1 by $1,000.
• D) M1 falls as Joan spends her money.

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Definitions:

Processing

The act of reflecting on and making sense of information, experiences, or emotions.

Receiving

The act of accepting or taking in something offered, often in the context of communication, goods, services, or ideas.

Sending

The act of delivering, dispatching, or transmitting information, messages, or goods from one place or person to another.

Reflection

The process of contemplating one's thoughts, feelings, and actions to learn or gain insights from experiences.