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Joe deposits $200 in currency into his checking account at a bank. This deposit is treated as O no change in the money supply because the $200 in currency has been converted to a $200 increase in checkable deposits O an addition of $200 to the money supply because the bank holds $200 in currency and the checking account has been increased by $200 O an addition of $200 to the money supply because of the creation of a checkable deposit of $200. O a subtraction of $200 from the money supply because the $200 in currency is no longer in circulation.

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The deposit by Joe is treated as no change in the money supply because the $200 in currency has been converted to a $200 increase in checkable deposits.

What are money supply and its types?

In macroeconomics, the term "money supply" refers to the total amount of money that the general public is holding at any given time. There are many ways to define "money," but the two most common metrics are demand deposits and currency in circulation. The term "money supply" describes both the quantity of money that is available to a country's people and the amount of money that may be used in the economy of that country.

Currency and demand deposits kept by banks are the two halves of the money supply. Paper money and coins are the two types of currency that are produced. The money supply is crucial because if it expands more quickly than the economy's capacity to generate commodities and services, then inflation will result. 

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