Ask Question
BusinessBusiness
29 October, 00:47

John withdraws $100 from his checking account and deposits it in his saving account. What will be the effect of this transaction on different measures of money, i. e. C, M1, and M2

+5
Answers (1)
  1. 29 October, 00:53
    0
    C is Currency in circulation

    M1 is Coins, Currency, money is checking account, travelers checks etc. This basically include all units of money which are highly liquid and can be used at an instant.

    M2 includes M1 and certain units of money which are less liquid e. g. savings, time deposits, term deposits etc.

    Here, John is withdrawing $100 from his checking account and depositing in savings account hence this will decrease the M1 since M1 does not include savings account. There will not be any change in M2 since both checking and savings account are a part of that.

    Since this transaction does not include currency in circulation, there will be no impact on C.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “John withdraws $100 from his checking account and deposits it in his saving account. What will be the effect of this transaction on ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Darlene Company had checks outstanding totaling $5,400 on its June bank reconciliation. In July, Darlene Company issued checks totaling $38,900. The July bank statement shows that $26,300 in checks cleared the bank in July.
Answers (1)
Explain the importance of contracts when analyzing revenue arrangements.
Answers (1)
Scot and Vidia, married taxpayers, earn $92,000 in taxable income and $5,000 in interest from an investment in City of Tampa bonds. (Use the U. S. tax rate schedule for married filing jointly). (Do not round intermediate calculations.
Answers (1)
Flitter reported net income of $25,000 for the past year. at the beginning of the year the company had $215,000 in assets and $65,000 in liabilities. by the end of the year, assets had increased to $315,000 and liabilities were $90,000.
Answers (1)
Orange County, New York, deeded two lots to Josclynne and Harriet Grier. At the time of the execution of the deeds, all the parties believed that Orange County owned the property.
Answers (1)
New Questions in Business
Pip owns Great Expectations, a trendy restaurant in Manhattan. He enters into a contract with Estella, who makes and sells pastries. The contract states that Estella will "supply all of Great Expectation's needs" for pastries for the next year.
Answers (1)
What should government do with its spending and taxes during a recession
Answers (1)
The management of Osborn Corporation is investigating an investment in equipment that would have a useful life of 5 years. The company uses a discount rate of 12% in its capital budgeting.
Answers (1)
Are there public functions that might benefit from more competition, including competition from private firms?
Answers (1)
Why do multi-national hotel groups prefer local citizens to serve in top-level - management positions? The salaries to local managers will be lower. It is easier to find well-trained and high â quality managers locally.
Answers (1)
Home » Business » John withdraws $100 from his checking account and deposits it in his saving account. What will be the effect of this transaction on different measures of money, i. e. C, M1, and M2
Sign Up Forgot Password?