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Indicate what happens to M1 & M2 under each of the following independent scenarios.
a) you write a check for cash at the casino
b) an individual moves funds from a small-denomination time deposit to a savings deposit account
c) an individual responds to the financial crisis by selling her stocks (which have lost 55% of their value)
and puts the funds in her savings account
d) as the economy improves, banks ease their credit standards and approve a higher percentage of loan applications
e) you spend $4,000 in U.S. currency while on your spring break trip to Acapulco (if you spent less than
that you could not have had much fun)
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