When Maria Deposits $100 in Currency in Her Checkable Deposit

question 49

Multiple Choice

When Maria deposits $100 in currency in her checkable deposit at Bank of America,the immediate effect is that the quantity of M1 ________ because ________.

• A)decreases;checkable deposits are included in M2 but are not included in M1
• B)does not change;both currency and checkable deposits are included in M1
• C)increases;both currency and checkable deposits are included in M1
• D)changes,but the direction of the change cannot be determined;the direction of the change depends on what Bank of America does with the deposit
• E)changes only if Bank of America has excess reserves;if the bank does not have excess reserves,the overall effect to M1 is too small to notice

---

Definitions:

Childhood Disintegrative

A rare condition characterized by late onset (usually after at least two years of normal development) of developmental delays in language, social function, and motor skills.

Repetitive Manner

Performing actions or behaviors over and over again in a consistent and unvarying way.

Self-Stimulatory Behaviors

Repetitive actions or movements, often seen in individuals with developmental disorders, that are used for self-soothing or sensory stimulation.

Statistically Significant

A determination that a relationship between two or more variables is caused by something other than chance at a specified level of probability.