If households in the economy decide to take money out of checking account deposits and use this money to buy stocks, this will initially   A. not change M1 and increase M2.   B. decrease M1 and not change M2.   C. increase M1 and decrease M2.   D. decrease M1 and increase M2.   E. decrease M1 and decrease M2.

ECON MACRO
5th Edition
ISBN:9781337000529
Author:William A. McEachern
Publisher:William A. McEachern
Chapter14: Banking And The Money Supply
Section: Chapter Questions
Problem 2.3P
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If households in the economy decide to take money out of checking account deposits and use this money to buy stocks, this will initially

  A.

not change M1 and increase M2.

  B.

decrease M1 and not change M2.

  C.

increase M1 and decrease M2.

  D.

decrease M1 and increase M2.

  E.

decrease M1 and decrease M2.

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