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Problem 02.18 Assuming no interest is paid on checking accounts, what would you expect to see happen to the relative growth rates of M1 and
Problem 02.18 Assuming no interest is paid on checking accounts, what would you expect to see happen to the relative growth rates of M1 and M2 ir interest rates rose significantly? When interest rates rise, you would expect that people would shift funds from (Click to select accounts into (Click to select) accounts, as the opportunity cost of holding funds in a noninterest-bearing account has (Click to select). Therefore, you would expect a relative increase in the Click to select growth rate, as (Click to select includes checking but not savings and (Click to select includes both checking and some types of savings
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