Suppose you withdraw $1,000 from your savings account and put it in your checking account. Briefly explain how this will affect M1 and M2
What will be an ideal response?
M2 will not change and M1 will rise by $1,000. Going from a savings account to checking account would raise M1, but both are part of M2, so M2 would not change.
Economics
You might also like to view...
Which type of tariff is used to offset subsidies on exports entering the United States?
a. antidumping duties b. countervailing duties c. export duties d. safeguard duties levied under the escape clause
Economics
Which of the following transactions is a debit in the US current account?
A) Export of merchandise B) Export of services C) Gifts to foreigners D) Foreign bond purchases
Economics