ECON 201 SUMMER I 2018 E21 Ralph Saint Felix62918 640 PM Hom

ECON 201 SUMMER I 2018 E21 Ralph Saint Felix&6/29/18 6:40 PM Homework: Final Exam Score: 0 of 1 pt Multiple Choice Quiz 3 Save 9 of 16 (0 complene) Hw Score: 0%, O of 16pts EQuestion Help Rick withdraws $500 trom his savings account, keeps $100 as oumenc, and depoeils $400 in his checking aocount O A Mi ncneasos ty 400 and M2 decreas by $600 OB. MI increases by S500 and M2 does not change O C. M1 does not change, but M2 decreases by $40 O D. M1 does not change, but M2 decreases by $500 Cick to select your answer and then click Check Anawer All parts showing Clear All Check Answer

Solution

M1 includes only the cash and the checking deposits. And the M2 includes M1+the near such as the savings deposits, money market securities, mutual funds and other time deposits.

So the ans: M1 increases by 500 and M2 does not change. (remeber M2 includes the M1).