Use the information below to answer the following questions.
Fact 8.4.1
The Bank of Speedy Creek has chosen the following initial balance sheet:

-Refer to Fact 8.4.1.Huck Finn comes along and deposits $10.After Huck's deposit, but before any other actions occur, the total amount of money in the economy
A)has stayed the same, with its components unchanged.
B)has fallen, with currency decreasing and deposits staying the same.
C)has risen, with currency unchanged and deposits increasing.
D)has fallen, with currency decreasing and deposits unchanged.
E)has stayed the same, with currency decreasing and deposits increasing.

Question

Use the information below to answer the following questions.
Fact 8.4.1
The Bank of Speedy Creek has chosen the following initial balance sheet:
 
-Refer to Fact 8.4.1.Huck Finn comes along and deposits $10.After Huck's deposit, but before any other actions occur, the total amount of money in the economy
A)has stayed the same, with its components unchanged. 
B)has fallen, with currency decreasing and deposits staying the same. 
C)has risen, with currency unchanged and deposits increasing. 
D)has fallen, with currency decreasing and deposits unchanged. 
E)has stayed the same, with currency decreasing and deposits increasing.

Quizplus · Accepted Answer

When Huck Finn deposits $10, the total amount of money in the economy remains the same. However, the composition of the money changes: currency in circulation decreases by $10, while deposits in the banking system increase by $10.

Use the Information Below to Answer the Following Questions