If Money Is Moved from a Consumer Checking Account into a Consumer

question 40

Multiple Choice

If money is moved from a consumer checking account into a consumer savings account,

• A)M1 and M2 both increase.
• B)M1 increases and M2 decreases.
• C)M1 decreases and M2 remains unchanged.
• D)M1 and M2 both remain unchanged.

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Definitions:

Classical decision

A decision-making approach based on rational analysis and choice, often associated with maximizing outcomes using a clear set of preferences and information.

Behavioral decision

Decisions made based on the observation and understanding of the behavior of individuals or groups, often in the context of behavioral economics or psychology.

Uncertain environments

describe situations or contexts in which there is a lack of clear information or predictability, making it difficult to make decisions or plan effectively.

Behavioral responses

The observable reactions or actions of an individual or group in response to external stimuli.