An increase in 1 billion dollars in savings in the economy would result inan increase in M1 onlyO an increase in M1 and no change in M2O an increase in M1 and M2O an increase in M2 only

It can be defined as the concept of the financial market that represents a form of deposit in which…

Answered: An increase in 1 billion dollars in…

An increase in 1 billion dollars in savings in the economy would result in O an increase in M1 only O an increase in M1 and no change in M2 O an increase in M1 and M2 O an increase in M2 only

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter27: Money And Banking

Section: Chapter Questions

Problem 3SCQ: If you are out shopping for clothes and books, what is easiest and most convenient for you to spend:...

See similar textbooks

Related questions

Q: Using the midpoint formula for calculating the elasticity of demand, if the price of a good fell…

A: Demand elasticity measures how sensitive a good's quantity desired is to variations in its price. It…

Q: Question 2 Price control question The government has imposed an effective price control of $500. The…

A: Price control is the restriction imposed by the government to ensure affordable goods and services…

Q: continental airlines operate in and out of many countries. country A has a low inflation rate of 2.2…

A: Purchasing power is the limit of an individual or entity to buy goods and services with the money…

Q: Clare is contemplating her possible consumption patter for this year and next. She know that she…

A: Consumption is an important component of GDP. In economics the consumption refers to usage of…

Q: Determine the interest rate (1) that makes the pairs of cash flows shown economically equivalent.…

A: Present Worth (PW), also known as Present Value (PV), is a financial concept used to evaluate the…

Q: Social Forces: Social forces include social/cultural factors such as purchasing habits, educational…

A: Identify the five forces that affect market competition:Rivalry among existing firmsThreat of new…

Q: QUESTION 27 If the price of gasoline has increased from $2 per gallon to $4 per gallon at the same…

A: Inflation-adjusted price, also known as the real price, refers to the price of a good or service…

Q: Michael runs a small pottery firm. He hires one helper at $14,000 per year, pays annual rent of…

A: Total revenue is the product of price and quantity. Monetary expenses are the explicit cost.…

Q: Suppose that the annual rates of growth of real GDP in Econoland over a five-year period were…

A: The growth of real GDP refers to the increase in the inflation-adjusted value of all goods and…

Q: QUESTION 2 1. The situation in which the average of all prices of products is rising is called…

A: “Since you have posted multiple questions with multiple sub parts, we will provide the solution only…

Q: The table below shows nominal and real GDP figures for a hypothetical economy. Note that 2022 is the…

A: GDP is the gross domestic product. GDP is defined as the market value of all the final goods and…

Q: QUESTIONS APPLY TO GRAPH 28. Suppose IP is the international trade price and this country's…

A: The tariffs is a tax on the goods or services which is internationally traded. The tariffs on the…

Q: A decrease in the price of a substitute good would be represented by a movement from

A: Two goods are substitutes if the products could be used for the same purpose by the consumers. That…

Q: 60 50 40 30 Comerica Park: 42,000 Capacity MC DL DH

A: Marginal revenue (MR) is a fundamental concept in microeconomics and is used to analyze how changes…

Q: The graphs of total revenue (R), total cost (C), variable cost (VC), fixed cost (FC), and profit (P)…

A: The cost function is the mathematical connection between the cost of a product and its different…

Q: Consider this graph of the payoffs from the game with Bill and Ted in Activity #1 of Session 4B.…

A: Pareto efficiency, also known as Pareto optimality, is an economic state where resources are…

Q: 2) Suppose that real GDP grew at 4% for three years. In year 4, real GDP growth fell smoothly to…

A: Real GDP, or Gross Domestic Product at regular prices, is a measure of the whole financial output or…

Q: Using supply and demand curves, show the effect of each of the following events on the market for…

A: The link between the amount of a product provided and its price, while maintaining other variables…

Q: Michael runs a small pottery firm. He hires one helper at $14,000 per year, pays annual rent of…

A: Total revenue is the product of price and quantity. Monetary expenses are the explicit cost.…

Q: If taxes were cut by $1 trillion and the MPC was 0.93, by how much would total spending a. Increase…

A: Total spending, otherwise called aggregate spending, alludes to the overall measure of money spent…

Q: The elasticity of demand is ε = (Enter your response rounded to one decimal place and include a…

A: The elasticity of demand is calculated by taking the ratio of percentage change in quantity demanded…

Q: What the information sets in the above game denote? Player 2 does not observe the action of player…

A: Game is provided in a extensive form with player 1 starting the game by choosing between (a , b, c,…

Q: Jeremy has a monthly income of $60. He spends his money making telephone calls (good ?, measured in…

A: (a) To describe Jeremy's budget constraints under each plan, we need to calculate the maximum number…

Q: If Mylan continues to charge $150 per EpiPen, Mylan will earn True or False: Given the demand curve…

A: Substitute goods are the alternative options that are presented to the consumers, which yield…

Q: 3. Using the graph below, show the market equilibrium when a $30 per-unit tax is imposed. 4. What…

A: The loss of economic efficiency that occurs when the equilibrium of a market is not at the optimal…

Q: CUPS OF COFFEE K 1 Graph (a) 2 3 DONUTS 4 N M Figure 2-4 CUPS OF COFFEE a. The trade-off between the…

A: A Production Possibility Curve (PPC), also known as a Production Possibility Frontier (PPF), is a…

Q: Suppose that real GDP grew at 4% for three years. In year 4, real GDP growth fell smoothly to -2%,…

A: Real GDP, or Gross Domestic Product at regular prices, is a measure of the whole financial output or…

Q: Using a graph, explain how an increase in technology will effect the equilibrium price and quantity…

A: The link between the amount of a product provided and its price, while maintaining other variables…

Q: Suppose the current economy requires $7 million for transactions. The table below shows the interest…

A: Transaction demand for money refers to money held by people for the purpose of everyday…

Q: Answer the question on the basis of the following demand and cost data for a specific firm. (1)…

A: The study and evaluation of corporate financial concerns using abstract economic concepts and ideas…

Q: f the MPC in an economy is 0.75, government could close a recessionary expenditure gap of $300…

A: The MPC in an economy is 0.75There is a recessionary expenditure gap of $300 billion in the economy.…

Q: Given a demand curve of P = 1200 - 40Qd and supply of P = 200 + 10Qs and a binding price control at…

A: Transfer of Surplus: Transfer of surplus refers to the change in consumer surplus and producer…

Q: ALL QUESTIONS APPLY TO GRAPH 23. What quantity will Country B supply from the rest of the world at…

A: International trade refers to the exchange of goods, services, and capital between countries or…

Q: With consumption on the vertical axis and leisure on the horizontal axis, the slope of the budget…

A: With a certain budgetary limitation, a budget line shows the combinations of two items or tasks that…

Q: You own a local company. In the past year, you successfully expanded your sales market into Europe,…

A: The currency market is significant because it determines exchange rates that enable for worldwide…

Q: Consider the market for pork illustrated in the graph. Suppose initial demand (D¹) is Q=280-20p and…

A: The demand curve is the downward sloping curve. Supply curve is the upward sloping curve.…

Q: The table below shows data for the production of Avocados for an individual firm operating in a…

A: By balancing total income and total expense, profit maximisation includes determining the amount at…

Q: Interest Rate (%) 10 8 00 6 N 0 Investment Demand $10 20 30 40 50 Investment ($) Show Transcribed…

A: Investment is function of interest rate and income I= f( Y,interest rate).. here interest rate is…

Q: Discuss whether your money, wealth, or income increases in each of the following situations: The…

A: Wealth makes bigger refers to a make bigger in an individual's or entity's common economic internet…

Q: Consider Figure 5.7. If Ksk is the current capital stock in South Korea and KCH is the current…

A: The growth rate is affected by the availability of capital stock. The higher the level of saving,…

Q: If the growth rate of the money supply is 0.06, the growth rate of output is 0.04, and the velocity…

A: Inflation is the rate at which the general price level of goods and services is rising. It is…

Q: I feel that the strongest moral consideration in favor of capitalism would be the freedom to pursue…

A: The wealth gap is the difference in wealth between different groups of people. It is a growing…

Q: What is the set of techniques in the making of decisions, wh looks at them subjectively and does NOT…

A: Cost-Effective Analysis is a decision-making technique that assesses the efficiency of various…

Q: Change in Demand Determinants: The PRC's increased demand for US crop products, such as corn and…

A: Demand refers to the quantity of goods or service that a consumer is willing and able to buy at a…

Q: Assuming the Marshall-Lerner condition holds and using the ZZ/Y and NX graphs, illustrate…

A: The Marshall–Lerner condition is satisfied if the absolute sum of a country's export and import…

Q: If when real GDP equals $800 billion, imports equal $100 billion, and when real GDP equals $900…

A: When real GDP is $800 billion then imports =$100 billionWhen real GDP is $900 billion then imports…

Q: According to globalization opponents, what is a disadvantage of globalization? Multiple Choice Free…

A: Globalization refers to the process of increasing interconnectedness and integration of economies,…

Q: In 2015, the weather conditions were better than normal, leading to higher rainfalls filling up the…

A: The demand curve is the downward-sloping curve. The supply curve is the upward-sloping curve. The…

Q: The diagram to the right displays short-run cost curves for a facility that produces liquid crystal…

A: Total cost is the sum of Fixed and variable cost. Fixed cost is the cost that remains same at all…

Q: Due to economic uncertainties, the sales department is forecasting reduced sales over the next six…

A: Breakeven is where the total revenue is equal to the total cost. Total revenue is the product of…

Question

An increase in 1 billion dollars in savings in the economy would result in
an increase in M1 only
O an increase in M1 and no change in M2
O an increase in M1 and M2
O an increase in M2 only

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Explain time deposit

VIEW

Step 2: Determine the correct option

VIEW

Step 3: Explain why other option are incorrect

VIEW

Solution

VIEW

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Sarafina withdraws $450 from her saving account and places the money in her wallet. This transaction will Select one: O a. not change M1 and decrease M2. Ob. increase M1 and not change M2. OC. increase both M1 and M2. O d. decrease both M1 and M2. Next
Suppose you transfer the balance of your savings account at your credit union to your chequing account at your bank. How would this transfer of money affect M2 and M2+? Select one: M2 would increase and M2+ would fall. O b. M2 would inerease and M2+ would stay the same. Oc There would be no change in either M2 or M2+ d. Both M2 and M2+ would fall Clear my choice
What does m1,m2 m3 include in detail ??
John Antonio transfers $5000 from his checking account to his savings account. How are M1 and M2 affected by this decision? a.M1 increases and M2 decreases b.M1 and M2 remain the same c.M1 decreases and M1 increases d.M1 increases and M2 increases e.M1 decreases and M2 decreases
Calculate net time deposit with banks if M3 is $22,000 and M1 is $6500
2. Determine whether each of the following is included in both M1 and M2 or M2 only: a. a Connecticut quarter b. a savings account at a local savings bank c. a share draft account at a credit union d. money market deposit accounts e. American Express travelers' checks
Ali transfers 1000 dollars from his checking account to his savings account. This transactionwilla) decrease both M1 and M2.b) not change M1 and decrease M2.c) decrease M1 and not change M2.d) increase both M1 and M2.
Professor Rush withdraws $20 from his checking account at Bank of Gainesville, keeps $15 in cash, and deposits the remainder in his savings account. These transactions O decrease M1 by $15 and do not change M2 O None of these answers is correct. O increase M1 by $20 and do not change M2 O increase M1 by $15 and decrease M2 by $15 O decrease M1 by $5 and increase M2 by $5
Question 2 Jaime transfers $2,500 from his checking account to his savings account. This transaction will Select one: a. decrease both M1 and M2. b. increase both M1 and M2. C. decrease M1 and not change M2. d. not change M1 and decrease M2.
If traveler’s checks were $500 higher and saving deposits were $1,000 higher, M1 would be?
why does m2 fall and not remain unchanged? doesn't M2 consist of both M1 and M2? so when M1 rise (due to more cash), savings account (which is under M2) will drop by the same amount as M1 rise, hence overall M2 will remain unchanged?
What is M1, M2 and M3