Tony deposits $2,000 in cash at the Last National Bank and the bank credits Tony's chequing account in the amount of $2,000.How does this immediately affect the money supply M1+?

Question

Quizplus · Accepted Answer

When Tony deposits $2,000 in cash into his chequing account, the cash, which is part of M1+, is simply being transferred from one form (physical currency) to another (demand deposit). This does not change the total amount of M1+, but rather the composition within M1+.

Tony Deposits $2,000 in Cash at the Last National Bank