If an Individual Uses Money from a Demand Deposit Account

question 75

Multiple Choice

If an individual uses money from a demand deposit account to purchase a U.S. savings bond

• A)M1 decreases and M2 stays the same.
• B)M1 stays the same and M2 increases.
• C)M1 stays the same and M2 stays the same.
• D)M1 decreases and M2 decreases.

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Definitions:

Irrevocability

The quality of being irreversible or unchangeable, often used in legal contexts to describe contracts or decisions that cannot be revoked or undone.

Unilateral Contract

A contract in which one party makes a promise in exchange for the other party's performance, becoming binding once performance is completed.

Bilateral Promise

An agreement in which two parties make commitments to perform certain actions or obligations to one another.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made to a second party when the latter has reasonably relied on that promise to their detriment.