If You Deposit $100 into a Demand Deposit at a Bank

question 157

Multiple Choice

If you deposit $100 into a demand deposit at a bank, what does this action do to the money supply?

• A) It increases the money supply by more than $100.
• B) It increases the money supply by less than $100.
• C) It decreases the money supply by more than $100.
• D) It decreases the money supply by less than $100.

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Definitions:

Total Costs

The sum of all expenses a business incurs to produce or sell its products or services, including fixed and variable costs.

Marginal Costs

The cost associated with producing one extra unit of a commodity, emphasizing the importance of scale in production.

Average Total Costs

The total cost of production divided by the number of units produced, representing the cost per unit.

Average Fixed Costs

Fixed production costs (unchanged by output volume) divided by the total produced output quantity.