Asked by Ja'Nayla Watts on May 12, 2024
Verified
If Mike McCulley puts $500 worth of traveler's checks left over from a vacation back into his checking account
A) M1 decreases.
B) M1 increases.
C) M1 does not change.
M1
Currency, checking deposits, and check-like deposits.
- Illustrate the procedure through which money comes into existence and is dissolved in the banking framework.
Verified Answer
SA
Saeed AlZarouniMay 18, 2024
Final Answer :
C
Explanation :
M1 does not change because traveler's checks are considered part of M1, and moving money from traveler's checks to a checking account does not alter the total amount of money in the M1 money supply.
Learning Objectives
- Illustrate the procedure through which money comes into existence and is dissolved in the banking framework.