Final answer:
Joseph's transfer of $2,000 from his checking account to his savings account does not directly affect the money supply. It is simply a transfer of funds from one account to another within the same bank.
Step-by-step explanation:
Joseph's transfer of $2,000 from his checking account to his savings account does not directly affect the money supply. It is simply a transfer of funds from one account to another within the same bank.The money supply refers to the total amount of money in circulation in an economy. It is typically measured by M1 and M2. M1 includes physical currency in circulation, demand deposits (such as checking accounts), and traveler's checks. M2 includes M1 plus savings deposits, time deposits, and money market mutual funds.In this case, Joseph's transfer would not result in an increase or decrease in the money supply. It is important to note that money supply is influenced by factors such as central bank actions, government policies, and economic conditions.