Logan finds $10 in his jacket pocket and deposits it into a bank. As a result of this single transaction, M1 has
A) increased by $10.
B) increased by more than $10.
C) increased by less than $10.
D) not changed.

Question

Quizplus · Accepted Answer

M1 includes currency in circulation plus checking deposits. Moving money from a pocket to a bank account does not change the total amount of currency and checking deposits in the economy.

Logan Finds $10 in His Jacket Pocket and Deposits It