If you liquidate $3,000 of your Canada Savings Bonds and transfer the funds to your chequing account, then initially, M1+ will ________ and M2++ will ________.

Question

Quizplus · Accepted Answer

M1+ includes currency and demand deposits, so transferring funds from savings bonds to a chequing account increases M1+. M2++ includes M1+ and other near monies, so the total money supply measured by M2++ does not change; it's just redistributed within its components.

If You Liquidate $3,000 of Your Canada Savings Bonds and Transfer