Homework Answers
Answer : 21) The answer is option B.
M1 include cash, checkable deposits, traveler's check. M2 include M1, saving deposits, money market fund, certificate deposit and other term deposits.
Deposit account is a savings account.
As here $100 becomes cash from deposit account hence M1 will increase. But as M2 include both M1 and savings account hence M2 will not change.
Hence except option B other options are not correct. Therefore, option B is the correct answer.
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