Question 5 Homework ⚫ Answered ⚫ Due Jul 24th, 11:50 PM MONEY IN THE ECONOMY ($billions) Currency held by the public = $1,000 Demand Deposits = $3,000 Other Liquid Deposits = $12,000 Small Denomination Time Deposits = $500 Retail Money Market Funds = $1,500 Use the information above to answer this item. If depositors move $100 billion from demand deposits to small denomination time deposits, then: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b C the value of M1 stays the same, the value of M2 increases by $100 billion, and the system becomes less liquid. the value of M1 decreases by $100 billion, the value of M2 stays the same, and the system becomes less liquid. the value of M1 decreases by $100 billion, the value of M2 increases by $100 billion, and the system becomes less liquid. × Your answer d the value of M1 stays the same, the value of M2 stays the same, and the liquidity of the system does not change.
Question 5 Homework ⚫ Answered ⚫ Due Jul 24th, 11:50 PM MONEY IN THE ECONOMY ($billions) Currency held by the public = $1,000 Demand Deposits = $3,000 Other Liquid Deposits = $12,000 Small Denomination Time Deposits = $500 Retail Money Market Funds = $1,500 Use the information above to answer this item. If depositors move $100 billion from demand deposits to small denomination time deposits, then: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b C the value of M1 stays the same, the value of M2 increases by $100 billion, and the system becomes less liquid. the value of M1 decreases by $100 billion, the value of M2 stays the same, and the system becomes less liquid. the value of M1 decreases by $100 billion, the value of M2 increases by $100 billion, and the system becomes less liquid. × Your answer d the value of M1 stays the same, the value of M2 stays the same, and the liquidity of the system does not change.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Question 5
Homework ⚫ Answered ⚫ Due Jul 24th, 11:50 PM
MONEY IN THE ECONOMY ($billions)
Currency held by the public = $1,000
Demand Deposits = $3,000
Other Liquid Deposits = $12,000
Small Denomination Time Deposits = $500
Retail Money Market Funds = $1,500
Use the information above to answer this item. If depositors move $100 billion from demand deposits to small denomination time
deposits, then:
Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.
a
b
C
the value of M1 stays the same, the value of M2 increases by $100 billion, and the system becomes less liquid.
the value of M1 decreases by $100 billion, the value of M2 stays the same, and the system becomes less liquid.
the value of M1 decreases by $100 billion, the value of M2 increases by $100 billion, and the system becomes
less liquid.
×
Your answer
d
the value of M1 stays the same, the value of M2 stays the same, and the liquidity of the system does not change.
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