If Many People Were to Suddenly Deposit into Their Checking

question 156

Multiple Choice

If many people were to suddenly deposit into their checking accounts large sums of cash previously held in their homes and/or wallets, and there were no offsetting actions by the Fed or change in institutional policies, this would

• A) decrease the M1 money supply but increase the M2 money supply.
• B) increase the excess reserves of banks and expand the money supply if these reserves are used to make additional loans.
• C) reduce the excess reserves of banks and indirectly decrease the M1 money supply.
• D) reduce the excess reserves of banks and indirectly increase the M1 money supply.

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Definitions:

Parcel Identification Number

A unique numerical or alphanumeric code assigned to a parcel of land for identification and administrative purposes.

Electronic Registration System

A digital system used to record and manage the ownership and transactions of securities or properties.

Right of Way of Necessity

A legal grant allowing one to cross land owned by another, typically when it's essential for access to one's own land and no alternative route exists.

Express Easement

A right granted by a landowner for the use of a portion of their property for a specific purpose, explicitly stated in writing.