If You Transfer $1 000 from Your Savings Account to Your

question 168

Multiple Choice

If you transfer $1 000 from your savings account to your chequing account:

• A) M1+ decreases by $1 000,and M2 increases by $1 000.
• B) M1+ increases by $1 000,and M2 decreases by $1 000.
• C) M1+ and M2 don't change.
• D) M1+ increases by $1 000,but M2 doesn't change.

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Definitions:

Dollar Votes

The concept that consumers show their preferences and influence the market through where they choose to spend their money.

Consumer Sovereignty

The concept that consumers' preferences and decisions dictate the production of goods and services in an economy, emphasizing the power of consumer choice.

Market Economy

An economic system where supply and demand from private enterprise make all the economic decisions.

Economic Profit

The split between entirety of income and the full scope of expenditures, considering both clear and implicit financial obligations.