Question

Allen deposits $2,000 in his local bank earning 2 percent interest annually on his deposit. Jessica borrows $1,000 from the same bank and is charged an annual 7 percent interest rate. How do these two practices affect the money supply in the community?
In Jessica's case, but not Allen's, the money supply decreases.

In Allen's case, but not Jessica's, the money supply decreases.

In both Allen and Jessica's cases, the money supply increases.

In neither Jessica nor Allen's cases does the money supply increase.

Answer 1

The answer is C please give me brainliest

Answer 2

In Jessica's case, but not Allen's, the money supply decreases.

Jessica completed the task of withdrawing funds from the bank, through borrowing. Allen made a monetary deposit adding to the bank's availability of funds. These funds are often borrowed by other patrons in who borrow money from the bank-as Jessica did.