Assuming no other changes, if checkable deposits increase by $40 billion and currency in circulation decreases by $40 billion, the

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Quizplus · Accepted Answer

This is because checkable deposits and currency in circulation are both part of the M1 money supply. While the $40 billion increase in checkable deposits would suggest an increase in M1, the corresponding $40 billion decrease in currency in circulation balances out that increase, resulting in no net change in M1.

Assuming No Other Changes, If Checkable Deposits Increase by $40