If You Withdraw $100 from Your Checking Account and Deposit

question 115

Multiple Choice

If you withdraw $100 from your checking account and deposit it in your savings account:

• A) M1 rises and M2 falls.
• B) both M1 and M2 rise.
• C) M1 falls by $50 and M2 rises by $50.
• D) the monetary base rises.
• E) M1 falls and M2 is unchanged.

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Definitions:

Travellers' Cheques

Preprinted, fixed-amount cheques used by travellers to safely carry and spend money abroad.

Canadian Dollar

The official currency of Canada, often symbolized as CAD or denoted by the dollar sign '$' with a distinguishing C to indicate Canadian currency.

All-Inclusive Package

A package deal, often offered by resorts and tour operators, that includes all related costs like accommodation, meals, and services in one price.

Travel Agent

A professional who arranges travel plans and accommodations for clients.