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: $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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