Assuming No Other Changes, If Checkable Deposits Increase by $40

question 92

Multiple Choice

Assuming no other changes, if checkable deposits increase by $40 billion and currency in circulation decreases by $40 billion, the

• A) M1 money supply will decline.
• B) M1 money supply will not change.
• C) M2 money supply will decline.
• D) M2 money supply will increase.

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Definitions:

Adaptation

The process of adjustment or change in response to new conditions or environments, a fundamental aspect of biological and psychological evolution.

Disequilibrium

A state of cognitive imbalance between existing knowledge and new experiences, often leading to learning in developmental psychology.

Equilibration

A concept in developmental psychology referring to how children progress through different stages of cognitive development by balancing assimilation and accommodation.

Assimilation

In psychology, a cognitive process where new information is interpreted and integrated into existing schemas or knowledge structures.