If you deposit $100 into a demand deposit at a bank, what does this action by itself do to the money supply?
A)It does not change the money supply.
B)It increases the money supply.
C)It decreases the money supply.
D)It has an indeterminate effect on the money supply.

Question

Quizplus · Accepted Answer

Depositing money into a demand deposit account does not change the money supply; it simply changes the form of the money from physical cash to a bank deposit, both of which are part of the money supply.

If You Deposit $100 into a Demand Deposit at a Bank