Assume that Robin's checking account at Folsom Bank has a balance of $2,000. If Robin withdraws $200 of cash from the bank's ATM machine, by what amount does the M1 money supply change as a result of this single, isolated transaction?
a. No change.
b. M1 increases by $200.
c. M1 decreases by $200.
d. M1 increases by $200 times the reserve multiplier.

Question

04-03-2022
Business

Answered

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Assume that Robin's checking account at Folsom Bank has a balance of $2,000. If Robin withdraws $200 of cash from the bank's ATM machine, by what amount does the M1 money supply change as a result of this single, isolated transaction?
a. No change.
b. M1 increases by $200.
c. M1 decreases by $200.
d. M1 increases by $200 times the reserve multiplier.

Sagot :

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