When Cash Is Deposited in a Demand-Deposit Account in a Chartered

question 156

Multiple Choice

When cash is deposited in a demand-deposit account in a chartered bank:

• A)the money supply increases.
• B)the money supply decreases.
• C)the composition of the money supply changes.
• D)the composition of the money supply does not change.

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Definitions:

Equilibrium Quantity

The quantity of goods or services supplied is exactly equal to the quantity of goods or services demanded at the market equilibrium price.

Demand

The amount of a product or service that buyers are ready and able to buy at different prices over a specified time frame.

Supply

The total amount of a specific good or service available for purchase at any given time.

Wheat Farmer

An individual or entity engaged in the cultivation of wheat as a commercial agricultural activity.