Ruby Transfers $700 from Her Saving Account to Her Checking

question 91

Multiple Choice

Ruby transfers $700 from her saving account to her checking account. This transaction will

• A) increase M1 and not change M2.
• B) not change M1 and decrease M2.
• C) increase both M1 and M2.
• D) decrease both M1 and M2.

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Definitions:

Accounts Receivable

The money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Collateral

Collateral is an asset that a borrower offers to a lender to secure a loan. If the borrower fails to repay the loan, the lender has the right to seize the collateral.

Line of Credit Agreement

A legal agreement between a financial institution and a borrower that establishes a maximum loan balance that the lender allows the borrower to access.

Specified Period

A defined duration or timeframe during which certain actions, events, or conditions are intended to take place or be in effect.