A Decrease in Currency in Circulation Combined with an Equal

question 80

Multiple Choice

A decrease in currency in circulation combined with an equal increase in savings account deposits would:

• A)increase M1.
• B)have no effect on M1.
• C)increase M2.
• D)have no effect on M2.
• E)decrease M2.

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Definitions:

Consistent Principle

A rule or standard that is applied uniformly and reliably over time or across situations, without contradictions.

Jointly Exhaustive

A set of options or propositions is considered jointly exhaustive when it covers all possible scenarios or outcomes, leaving no possibility unaddressed.

Mutually Exclusive

Describing two or more events or conditions that cannot occur or be true at the same time.

Consistent Principle

A concept or rule that remains uniform and unchanged across different contexts or situations, ensuring coherence and reliability in application.