Explain why depositing cash into a checking account does NOT change the money supply
What will be an ideal response?
The deposited cash reduces the currency being held by the public by the same amount as the increase in the checking account. Since currency held by the public and checking accounts are both included in the supply of money, the total money supply does not change—only the location of the money has changed.
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When the British pound rises in value relative to other currencies, then
A) goods imported into Britain rise in price. B) British exports rise in price. C) neither British exports nor imports rise in price. D) both British exports and imports rise in price.
At a higher wage rate:
a. the opportunity cost of working increases. b. the opportunity cost of leisure increases. c. the opportunity cost of working decreases. d. the opportunity cost of leisure decreases.