Specifically, state what should happen to M1 and M2 (increas…
Specifically, state what should happen to M1 and M2 (increase, decrease, no change) due to each of the following events. Consider each lettered event to be independent of the others. a) The Federal Reserve purchases $750m in Treasury securities from member commercial banks in the 2nd district. These banks keep 10% of these funds in their vaults as reserves and lend the remainder to the public. M1 M2 b) A firm uses $400,000 from its checking account to purchase a negotiable CD from Wells Fargo bank. M1 M2 c) A gang of successful thieves rob an armored car transporting $5million in $2 bills to the San Francisco Fed. M1 M2 d) An individual receives a tax refund which is directly deposited into their checking account. M1 M2 e) A U.S. citizen living in the United States receives $125,000 cash (in $100 bills) from selling her boat in Sydney to an Australian citizen. She deposits $25,000 into her checking account and puts the other $100,000 into her money market deposit account. M1 M2