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:

Accounts Receivable

Amounts owed to a business by its customers for goods or services delivered or used but not yet paid for.

Note Duration

Note duration refers to the length of time until a financial note's principal and any accumulated interest are due to be repaid.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal, typically noted on an annual basis.

Direct Write-off Method

An accounting practice where uncollectible accounts receivables are written off directly against income at the time they are deemed noncollectable.