When Maria deposits $100 in currency in her checkable deposit at Bank of America,the immediate effect is that the quantity of M1 ________ because ________.
A)decreases;checkable deposits are included in M2 but are not included in M1
B)does not change;both currency and checkable deposits are included in M1
C)increases;both currency and checkable deposits are included in M1
D)changes,but the direction of the change cannot be determined;the direction of the change depends on what Bank of America does with the deposit
E)changes only if Bank of America has excess reserves;if the bank does not have excess reserves,the overall effect to M1 is too small to notice

Question

Quizplus · Accepted Answer

The Answer of When Maria deposits $100 in currency in her checkable deposit at Bank of America,the immediate effect is that the quantity of M1 ________ because ________.
A)decreases;checkable deposits are included in M2 but are not included in M1
B)does not change;both currency and checkable deposits are included in M1
C)increases;both currency and checkable deposits are included in M1
D)changes,but the direction of the change cannot be determined;the direction of the change depends on what Bank of America does with the deposit
E)changes only if Bank of America has excess reserves;if the bank does not have excess reserves,the overall effect to M1 is too small to notice

When Maria Deposits $100 in Currency in Her Checkable Deposit