Multiple Choice
Drawing on her account at First Guarantee Bank,Susan writes a check to Valerie,who deposits the check in her account at Citizens Bank.Once the check has cleared,which of the following will occur to the reserves of the banking system and the M1 money supply?
A) Bank reserves will increase;M1 will increase.
B) Bank reserves will increase;there will be no change in M1.
C) There will be no change in bank reserves;M1 will increase.
D) There will be no changes in either bank reserves or M1.
Correct Answer:
Verified
Correct Answer:
Verified
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