Jone currently has $6,000 in her savings account and $2,000 in her checking account at the local bank. Instructions: Use a positive number to represent an increase and a negative number to represent a decrease. a. Suppose she withdraws $550 in cash from her savings account. By what dollar amount does the countrys money supply (M and M2) change as a result of Jane's actions? Change in M: $ Change in M2$ b. Now suppose instead that Jane withdraws $550 from her checking account and uses $330 of this money to pay her federal income tax. After that, she uses $140 to buy a set of used golf clubs from her neighbor who deposits it into his checking account. Finally, she deposits the remaining cash from the $550 withdrawal into her savings account. By what dollar amount does the country's money supply change as a result of Jene's actions? Change in Mt: $ Change in M2: $
Jone currently has $6,000 in her savings account and $2,000 in her checking account at the local bank. Instructions: Use a positive number to represent an increase and a negative number to represent a decrease. a. Suppose she withdraws $550 in cash from her savings account. By what dollar amount does the countrys money supply (M and M2) change as a result of Jane's actions? Change in M: $ Change in M2$ b. Now suppose instead that Jane withdraws $550 from her checking account and uses $330 of this money to pay her federal income tax. After that, she uses $140 to buy a set of used golf clubs from her neighbor who deposits it into his checking account. Finally, she deposits the remaining cash from the $550 withdrawal into her savings account. By what dollar amount does the country's money supply change as a result of Jene's actions? Change in Mt: $ Change in M2: $
Chapter14: Money And The Federal Reserve System
Section: Chapter Questions
Problem 10SQ
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![Jone currently has $6,000 in her savings account and $2,000 in her checking account at the local bank.
Instructions: Use a positive number to represent an increase and a negative number to represent a decrease.
a. Suppose she withdraws $550 in cash from her savings account. By what dollar amount does the countrys money supply (M and
M2) change as a result of Jane's actions?
Change in M: $
Change in M2$
b. Now suppose instead that Jane withdraws $550 from her checking account and uses $330 of this money to pay her federal income
tax. After that, she uses $140 to buy a set of used golf clubs from her neighbor who deposits it into his checking account. Finally, she
deposits the remaining cash from the $550 withdrawal into her savings account. By what dollar amount does the country's money
supply change as a result of Jene's actions?
Change in Mt: $
Change in M2: $](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2e9fb7a6-c940-4212-929c-6e2c52ba920d%2F6c3816a5-4191-4504-a059-d4de53e5411b%2Fcsnmuyk_processed.png&w=3840&q=75)
Transcribed Image Text:Jone currently has $6,000 in her savings account and $2,000 in her checking account at the local bank.
Instructions: Use a positive number to represent an increase and a negative number to represent a decrease.
a. Suppose she withdraws $550 in cash from her savings account. By what dollar amount does the countrys money supply (M and
M2) change as a result of Jane's actions?
Change in M: $
Change in M2$
b. Now suppose instead that Jane withdraws $550 from her checking account and uses $330 of this money to pay her federal income
tax. After that, she uses $140 to buy a set of used golf clubs from her neighbor who deposits it into his checking account. Finally, she
deposits the remaining cash from the $550 withdrawal into her savings account. By what dollar amount does the country's money
supply change as a result of Jene's actions?
Change in Mt: $
Change in M2: $
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