Question Details

1) You earn $500 a month, currently have $200 in currency, $100in your checking account, $2,000 in your savings accounts, $3,000worth of illiquid assets and $1,000 of debt.

a) How much money (M1) do you have?

b) What is your annual income?

c) How much wealth do you have?

2) If a person withdraws $500 from his/her savings account andputs it in his/her checking account,

a) will M1 increase, decrease, or not change?

b) will M2 increase, decrease, or not change?

3) If a person withdraws $500 from his/her checking account andholds it as currency,

a) will M1 increase, decrease, or not change?

b) will M2 increase, decrease, or not change?