Suppose Stan transfers 1,000 from his checking account into a ...

[ssal]

Suppose Stan transfers 1,000 from his checking account into a savings account. What are the effects on M1 and M2 money supply?
 
  A) M1 increases; M2 decreases.
  B) M1 decreases; M2 remains the same.
  C) Both M1 and M2 increase.
  D) Both M1 and M2 decrease.
  E) Both M1 and M2 remain the same.

Question 2

Consider gardening books. What will happen to the market for these books as gardening becomes more popular and simultaneously printing costs increase?
 
  A) The price of gardening books definitely increases.
  B) The quantity of gardening books definitely increases.
  C) The price of gardening books might increase or decrease.
  D) The quantity of gardening books definitely stays the same.

[lkanara2]

Answer to Question 1

B

Answer to Question 2

A