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

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Definitions:

Shandong

A coastal province of Eastern China known for its significant historical and cultural sites.

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The geographic region consisting of thousands of islands within the Pacific Ocean, including Melanesia, Micronesia, and Polynesia.

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Refers to the people native to Germany or holding citizenship of Germany.

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An island country in East Asia known for its rich cultural heritage, technological advancements, and significant economic development post-World War II.