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Exhibit: Money in the Economy

-(Exhibit: Money in the Economy) In Year 1, if savings deposits had been $200 billion instead of $150 billion, M1 would have been
A) unaffected.
B) larger by $50 billion.
C) smaller by $50 billion.
D) $100 billion.

Question

Use the following to answer questions.
Exhibit: Money in the Economy
 
-(Exhibit: Money in the Economy) In Year 1, if savings deposits had been $200 billion instead of $150 billion, M1 would have been
A) unaffected. 
B) larger by $50 billion. 
C) smaller by $50 billion. 
D) $100 billion.

Quizplus · Accepted Answer

Savings deposits are not included in the M1 money supply, so changes in savings deposits do not affect M1.

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