If an Individual Moves Money from a Demand Deposit Account

question 30

Multiple Choice

If an individual moves money from a demand deposit account to a money market deposit account

• 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 increases and M2 decreases.

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Definitions:

Officially Unemployed

Officially unemployed refers to individuals who are without a job, actively seeking work, and currently available to take up employment.

Fully Employed Economy

A situation where all available labor resources are being used in the most economically efficient way, with minimal unemployment.

Cyclical Unemployment

Unemployment that results from business cycle fluctuations and the imbalances in supply and demand that arise in the economy over time.

Discouraged Workers

Individuals who are not actively looking for work because they believe no jobs are available for them or there are no jobs for which they would qualify.