If Ms Anniston Transfers $1,000 from Her Checking Account to Her

question 177

Multiple Choice

If Ms. Anniston transfers $1,000 from her checking account to her money market account, then

• A) M1 falls and M2 remains the same.
• B) M1 falls and M2 rises.
• C) both M1 and M2 rise.
• D) M1 remains the same and M2 rises.

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Definitions:

Profit Making

The activity of earning more money than what is spent on producing or buying goods or services, resulting in financial gain.

Industrial Revolution

A period of major industrialization that took place during the late 1700s and early 1800s, leading to significant changes in agriculture, manufacturing, mining, transportation, and technology, which had a profound effect on the socioeconomic and cultural conditions of the times.

Private Enterprise System

A system where private individuals or groups own and operate businesses with minimal government intervention, emphasizing profit and free market principles.

Invisible Hand

A term introduced by Adam Smith to describe the self-regulating nature of the marketplace that guides individuals to unintentionally benefit society through their personal gain.