Does this action directly affect the monetary base

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Reference no: EM131221555

Suppose someone keeps $100 in cash under her pillow. One day, she takes it out and deposits it in a checking account.

a. Does this action directly affect the monetary base or the money supply? Explain why or why not.

b. Does the action eventually lead to a change in the monetary base or the money supply? Explain why or why not.

Reference no: EM131221555

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