A series of bank runs in a country should have no effect on M1+ as money simply moves from chequing deposits to currency.

Question

Quizplus · Accepted Answer

A series of bank runs can affect M1+ because while the total amount of money (currency plus chequing deposits) may remain the same, the composition changes. More money is held as currency outside banks, which can reduce the amount available in chequing deposits, potentially impacting the liquidity and functioning of the banking system.

A Series of Bank Runs in a Country Should Have