If an individual moves money from a checking account into a savings account, then the value of M1 _____, and the value of M2:

Question

Quizplus · Accepted Answer

Moving money from a checking account to a savings account decreases M1 because M1 includes currency and checking deposits but not savings deposits. M2, which includes M1 plus savings deposits and other near monies, does not change because the total amount of money in the system (checking + savings) remains the same.

If an Individual Moves Money from a Checking Account into a Savings