Author Question: Other things being equal, if you took money out of your savings deposit account and put it in a ... (Read 173 times)

stevenposner · **on:** Jun 30, 2018

Other things being equal, if you took money out of your savings deposit account and put it in a demand deposit account:
a. M1 would increase and M2 would increase.
b. M1 would increase but M2 would not change.
c. M1 would decrease and M2 would decrease.
d. M1 would fall but M2 would not change.

Question 2

If the Fed aims to achieve a level of unemployment below its natural rate, it must follow time-inconsistent policies.
a. True
b. False
Indicate whether the statement is true or false