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If People Withdraw $10 Million from the Nation's Money Market

Question 202

Multiple Choice

If people withdraw $10 million from the nation's money market mutual funds and redeposit the funds in various checkable and debitable accounts, then


A) M1 and M2 will remain unchanged.
B) M1 will increase, M2 will remain unchanged.
C) M1 will increase, M2 will decrease.
D) M1 and M2 will increase.

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