Fred Jones withdraws $1,000 in cash from his savings account. What immediate effect does this transaction have on the monetary aggregate measures of M1 and M2?(A) M1 Increases, M2 decreases(B) M1 Increases, M2 no change(C) M1 Decreases, M2 no change(D) M1 no change, M2 decreases(E) M1 no change, M2 no change 32. Fred Jones withdraws $1,000 in cash from hissavings account. What immediate effect doesthis transaction have on the monetary aggregatemeasures of M1 and M2 ?M1M2(A) Increases(B) Increases(C) Decreases(D) No change(E) No changeDecreasesNo changeNo changeDecreasesNo change

The Amount that Fred withdraw is basically given to be as = $1000 cash M1 accordingly contains…

Answered: Fred Jones withdraws $1,000 in cash…

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter13: Money And The Banking System

Section: Chapter Questions

Problem 18CQ

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Fred Jones withdraws $1,000 in cash from his savings account. What immediate effect does this transaction have on the monetary aggregate measures of M1 and M2?
(A) M1 Increases, M2 decreases
(B) M1 Increases, M2 no change
(C) M1 Decreases, M2 no change
(D) M1 no change, M2 decreases
(E) M1 no change, M2 no change

32. Fred Jones withdraws $1,000 in cash from his
savings account. What immediate effect does
this transaction have on the monetary aggregate
measures of M1 and M2 ?
M1
M2
(A) Increases
(B) Increases
(C) Decreases
(D) No change
(E) No change
Decreases
No change
No change
Decreases
No change

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