Assume that Jones deposits $500 in currency into her checkable deposit account in First National Bank. A half

Question

Assume that Jones deposits $500 in currency into her checkable deposit account in First National Bank. A half‑hour later Smith obtains a loan for $750 at this bank. By how much and in what direction has the money supply changed? Explain.

Answer 1

No, no, no. The supply of money is not affected by these transactions. The bank is ($250) (negative) in cash flow and Jones is +250 in cash flow, with an open contract for Jones to repay the $750 (plus interest) and the retained right to withdraw the $500 deposited at the bank or write checks against it.

Answer 2

i might sit down on it. Worse than dropping 10 million is owing 10 million and that's related with a legal fee and reformatory time. If after some months to a year no replace, then i might initiate making deposits into offshore bills in smaller increments till it became long previous and severe-tail it off this continent! you should discover the money for a small military with that kinda moolah in much less wealthy worldwide places. Oh, and purchase a impressive style of malicious program spray.