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Henry Trudeau deposits $2,000 in currency in the First Street Bank. Later that same day Jane Harris negotiates a loan for $5,400 at the same bank. After these transactions, the supply of money has: (Hint: First consider whether Henry's deposit changes the money supply. Has M1 changed if money is held in the form of cash, and then held in a checking account

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Answer:

Increased by $5,400

Explanation:

Based on the information given if the amount of $2,000 was deposited in the bank in which the same day a loan of the amount of $5,400 was negotiated which simply means that supply of money has INCREASED by the negotiated loan amount of $5,400 to the already deposited amount of $2,000.

Therefore After these transactions, the supply of money has INCREASED BY $5,400.

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