Which of these would increase M1 in the country where Joe, Nan, and the Hardware Store are located?
A) Joe withdraws $500 from his checking account and deposits it in his savings account.
B) Joe withdraws $500 from his checking account and gives it to his sister Nan, who deposits it in her checking account.
C) Joe withdraws $500 from his savings account and deposits it in his checking account.
D) Joe spends $500 cash at the Hardware Store, and the store deposits the $500 in its checking account.

Question

Quizplus · Accepted Answer

Withdrawing from a savings account and depositing into a checking account increases M1, as M1 includes currency in circulation and demand deposits (checking accounts), but not savings accounts.

Which of These Would Increase M1 in the Country Where