If households in the economy decide to take money out of checking account deposits and put this money into savings accounts, this will initiallyQuestion 5Answera.decrease M1 and decrease M2.b.increase M1 and decrease M2.c.decrease M1 and not change M2.d.decrease M1 and increase M2.

Which of the following evets will cause a reduction in the total amount of reserves in the banking system, all else the same?Group of answer choicesBrad buys something from the grocery store using his ATM card.Geroge withdraws $1,000 for his checking account and pays it to Susan, who deposits it in her at her account in Bank B.Ian withdraws $10,000 from his deposit account and keeps it under his mattress.Someone pays back his loan to Bank A by writing a check on his account at Bank B.

8. Because checking accounts are liquid for the depositor than savings accounts, they earn interest rates. A) less; higher B) less; lower C) more; higher D) more; lower

Which of the following changes would be the mostlikely to reduce the size of the money multiplier?a. a decrease in the required reserve ratiob. a decrease in excess reservesc. an increase in cash holding by consumersd. a decrease in bank runse. an increase in deposit insurance

Which of the following actions of a central bank would decrease the money supply in the economy?A.Increase the target interest rateB.Decrease the minimum reserve requirement.C.Reduce the interest rate paid on bank reserve.D.Buy bonds through open market operations.

PART B: Which quote from the text best supports the answer to Part A?A. "a checking account holds your money and allows you to access it very easily at any time you would like." (Paragraph 3)B. "Money in a savings account is harder to access on demand, but the bank will pay you a small percentage of the total for keeping your money in that account." (Paragraph 4)C. "If you put $1,000 into a savings account, the bank will hold onto a small portion of it, maybe $100, and give the other $900 out to other customers as loans." (Paragraph 5)D. "Banks like to give out loans because when someone borrows money, they have to pay that money back along with interest on the money" (Paragraph 7)