Question

5. Critical analysis Q13 True or False: When you deposit currency in a checking account, cash goes out of circulation and the money supply declines. O True False Grade It Now Save & Continue Continue without saving

0 0
Add a comment Improve this question Transcribed image text
Answer #1

False. if someone deposite money into a checking account m1 and the money supply both increase.
"Whenever currency is deposited into a commercial bank, cash goes out of circulation and, as a result, the supply of money is increase because the M1 money supply consists of currency outside of the banks and checking account deposits of the public in commercial banks.

Add a comment
Know the answer?
Add Answer to:
5. Critical analysis Q13 True or False: When you deposit currency in a checking account, cash...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • 1. Suppose you withdraw $500 from your checking account at your bank, which has a required...

    1. Suppose you withdraw $500 from your checking account at your bank, which has a required reserve ratio of 30%. Initially, as a result of your this transaction, the size of M1 will.... (Increase/decrease/remain unchanged) . Before any further actions by your bank, the reserves in your bank..... Increase/decrease/remain unchanged) by... while the excess reserves of your bank ..... (Increase/decrease/remain unchanged) by .... 2. Suppose that the general public decided to decrease its holdings of currency and increase its checking...

  • 1.) Gold, silver, and furs, when used as money, are referred to as fiat money precious...

    1.) Gold, silver, and furs, when used as money, are referred to as fiat money precious money paper currency commodity money exchange money 2.) The money supply is considered to be M1. M1 consists of what? currency + checking account balances + saving account balances currency + checking account balances + travelers' checks currency + checking account balances + credit cards currency + credit cards + certificates of deposit currency only 3.) The main purpose of financial intermediaries is that...

  • Gold, silver, and furs, when used as money, are referred to as    a- fiat money b-precious...

    Gold, silver, and furs, when used as money, are referred to as    a- fiat money b-precious money c-paper currency d-commodity money The money supply is considered to be M1. M1 consists of what? a-currency + checking account balances + saving account balances    b-currency + checking account balances + travelers' checks    c-currency + checking account balances + credit cards    d-currency + credit cards + certificates of deposit    e-currency only   The main purpose of financial intermediaries is that a-the process of finding...

  • Search this cou Ch 04: Assignment - Managing Your Cash and Savings Answer Term Compound interest...

    Search this cou Ch 04: Assignment - Managing Your Cash and Savings Answer Term Compound interest A. Description This form of check is drawn on the account of a financial institution and is backed by the creditworthiness of the institution. It is often required by sellers in lieu of a personal check. Demand deposit Overdraft Account reconciliation D. This is a deposit held in a financial institution for a fixed period of time. Usually depositors can withdraw the money from...

  • Unit 5 Assignment Back to Attempts: Keep the Highest: 14 6. The money creation process Suppose...

    Unit 5 Assignment Back to Attempts: Keep the Highest: 14 6. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 5% Raphael, a client of First Main Street Bank, deposits $200,000 into his checking account at First Main Street Bank Complete the following table to reflect any changes in First Main Street Bank's T account (before the bank makes any new loans). Liabilities...

  • QUESTION 1 2 points Save Answer You are planning on having a garage sale, so you...

    QUESTION 1 2 points Save Answer You are planning on having a garage sale, so you put price tags on all your used goods that you want to get rid of. You are using money as a O a unit of account O a medium of exchange O a store of value QUESTION 2 2 points Save Answer Amanda routinely uses currency to purchase her groceries. She is using money as a O a unit of account O a medium...

  • checking account records and noticed the cash deposit and realized his mistake. Ethical Dilemma. When Larry...

    checking account records and noticed the cash deposit and realized his mistake. Ethical Dilemma. When Larry filed his taxes he forgot to include $2,500 in cash income he earned painting a friend's house. He was going through a. Should Larry ignore his mistake or file an amended return? Why or why not? b. What are possible consequences of Larry ignoring the error? a. Should Larry ignore his mistake or file an amended return? Why or why not? (Select the best...

  • true or false 20. The Federal Deposit Insurance Corporation insures all bank liabilities against default. 21....

    true or false 20. The Federal Deposit Insurance Corporation insures all bank liabilities against default. 21. The Securities Exchange Commission (S.E.C.) was set up by Congress in the 1930s to make sure that small investors make appropriate investments. 22. If a loan is an amortizer, the bank must lend additional funds to the borrower if and when she requests it. 23. Certificates of Deposit are a type of time deposit 24. You can buy a company's stock when the company...

  • answer every single picture QUESTION 5 Suppose James transfers $500 from his checking account to...

    answer every single picture QUESTION 5 Suppose James transfers $500 from his checking account to his savings account. As a result of this action, OM1 stays the same and M2 falls. M1 falls and M2 stays the same. OBoth M1 and M2 fall. OBoth M1 and M2 stay the same. We were unable to transcribe this image1 poi QUESTION 7 Suppose the required reserve ratio is 25%. Assuming that banks hold no excess reserves and consumers hold no cash, this...

  • 1. Concepts used in cash flow estimation and risk analysis You can come across different situations...

    1. Concepts used in cash flow estimation and risk analysis You can come across different situations in your life where the concepts from capital budgeting will help you in evaluating the situation and making calculated decisions. Consider the following situation: The following table contains five definitions or concepts. Identify the term that best corresponds to the concept or definition given. Concept or Definition Term An example of externality that can have a negative effect on a firm The cash flow...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT