If an individual moves money from a chequing account to a money market mutual fund,________.
A) M1+ decreases and M2+ increases
B) M1+ stays the same and M2+ increases
C) M1+ stays the same and M2+ stays the same
D) M1+ increases and M2+ decreases

Question

Quizplus · Accepted Answer

When money is moved from a chequing account (part of M1+) to a money market mutual fund, M1+ decreases because the funds are no longer in a chequing account. M2+ includes money market mutual funds, so it increases.

If an Individual Moves Money from a Chequing Account to a Money