Multiple Choice
Suppose individuals decide to reduce their holdings of term deposit funds. Further assume that these decisions put funds into current account deposits. Given this information, we know that:
A) the demand for M1 would increase and the demand for M3 would increase.
B) the demand for M1 would increase and the demand for M3 would decrease.
C) the demand for M1 would decrease and the demand for M3 would decrease.
D) the demand for M1 would decrease and the demand for M3 would increase.
E) the demand for M1 does not change and the demand for M3 would decrease.
Correct Answer:
Verified
Correct Answer:
Verified
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