When People Make Deposits of Currency into a Bank,the Quantity

question 75

Multiple Choice

When people make deposits of currency into a bank,the quantity of M1

• A)immediately decreases by the amount of the deposit.
• B)immediately increases by the amount of the deposit.
• C)does not immediately change.
• D)immediately changes but whether it increases or decreases depends on whether the bank had excess reserves or did not have excess reserves.
• E)changes only if the deposit is an open market operation.

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Definitions:

Long-run

A period in economics sufficient for all markets to adjust to changes, including those made in physical capital or production capacities.

Average Total Cost

The total cost of producing a particular quantity of output divided by the quantity of output produced, encompassing both fixed and variable costs.

Input Prices

The cost of resources used in the production of goods and services.

Total Costs

All costs involved in manufacturing goods or providing services, incorporating both stable and changeable expenses.