If money is moved from a consumer checking account into a consumer savings account,

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Quizplus · Accepted Answer

M1 includes forms of money that are highly liquid such as cash and checking account balances. Moving money from a checking account (part of M1) to a savings account (part of M2 but not M1) decreases M1. M2 includes M1 plus savings accounts and other near monies, so the total amount of M2 remains unchanged because the money is still within the broader category.

If Money Is Moved from a Consumer Checking Account into a Consumer