AP Macroeconomics 4.3: Money and Its Functions
Define money through its functions and distinguish M1, M2, currency, and demand deposits when measuring the money supply.
- Syllabus
- Effective Fall 2025
- Course
- AP Macroeconomics
Covered syllabus points
4.3 Definition, Measurement, and Functions of Money question 1
The following is a simplified balance sheet for Mi Tierra Bank in the United States.
Mi Tierra Bank
Assume that Luis withdraws $5,000 in cash from his checking account at Mi Tierra Bank.
What is the initial effect of the withdrawal on the M1 measure of money supply? Explain.
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