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Now suppose instead that Jane withdraws $550 from her checking account and uses $330 of this money to pay her federal income tax. After that, she uses $140 to buy a set of used golf clubs from her neighbor who deposits it into his checking account. Finally, she deposits the remaining cash from the $550 withdrawal into her savings account. By what dollar amount does the country's money supply change as a result of Jane's actions?

a. Change in M1:$____b. Change in M2:$____

Respuesta :

TomShelby

Answer:

a .- 0

b.-  0

Explanation:

let's add up the combine effect of each transaction made by Jane:

550 withdrawals

+330 the IRS deposit the cash

+140 neighbor deposits

+ 80 Jane Deposit*

   0

* deposit made by Jane:

550 - 330 aid taxes- 140 purchases used golf club = 80 deposits

As the money oes into different deposits amount the M1 and M2 is not change after this transactions

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