Question

Assume that Jimmy Cash has $2,300 in his checking account at Folsom Bank and uses his checking account card to withdraw $230 of cash from the bank’s ATM machine. Instructions: Enter your answer as a whole number. By what dollar amount did the M1 money supply change as a result of this single, isolated transaction?

Answer 1

Answer:

net change is 0

Explanation:

M1 type of money include cash and checking amounts. Jimmy withdraw $290 amount of money from account card by using bank ATM. Hence check able deposited is 2300 - 230 = $2070. This will decrease in M1 but the cash amount is also increases by some amount of $2300 therefore M1 again increase to same amount i.e. $2300. overall there is no change in M1 i.e net change is 0