When Maria Deposits $100 in Currency in Her Checkable Deposit

question 1

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

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Definitions:

Income Quintiles

A statistical measure dividing a population into five equal groups according to their income level for comparative analysis.

Government Spending

Expenditures by the government sector on goods and services that it consumes to provide public services and for the benefit of the community.

Personal Income Tax

Tax levied on individuals or households based on their total income from all sources.

Corporate Income Tax

A tax imposed on the net income or profit of corporations and other business entities by the government.