If a Check Written on One Bank Is Deposited in Another

question 370

Multiple Choice

If a check written on one bank is deposited in another bank

• A) the money supply increases.
• B) the money supply remains unchanged.
• C) the money supply decreases.
• D) new reserves are created for the banking system.

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Definitions:

Long-Run Equilibrium

A state in which market supply and demand balance each other, resulting in stable prices and optimal resource allocation over time.

Expected Price Level

This term indicates the average of current and anticipated prices for goods and services in an economy.

Short-Run Aggregate-Supply Curve

A graphical representation that shows the relationship between the total production of goods and services at different price levels in the short term, assuming some input prices are fixed.

Unemployment Rate

The measure of individuals in the labor force who are without jobs but are actively trying to find employment.