If a person withdraws 500 from his/her savings account and puts ...

[londonang]

If a person withdraws 500 from his/her savings account and puts it in his/her checking account, then M1 will ________ and M2 will ________.
 
  A) not change; not change
  B) not change; increase
  C) increase; not change
  D) not change; decrease
  E) increase; decrease

Question 2

Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D1 and S1 (point A).
 
  If the price of motorcycle engines increases, and the wages of motorcycle workers increase, how will the equilibrium point change?
  A) The equilibrium point will move from A to E.
  B) The equilibrium point will move from A to C.
  C) The equilibrium will first move from A to B, then return to A.
  D) The equilibrium point will move from A to B.

[meryzewe]

Answer to Question 1

C

Answer to Question 2

D