when alisha withdraws $1,000 from her chequing account to hold as currency. select one: a. m1+ is unchanged…

when alisha withdraws $1,000 from her chequing account to hold as currency. select one: a. m1+ is unchanged and m2+ is unchanged. b. m1+ increases and m2+ increases. c. m1+ increases and m2+ decreases. d. m1+ increases and m2+ is unchanged. e. m1+ is unchanged and m2+ decreases.

when alisha withdraws $1,000 from her chequing account to hold as currency. select one: a. m1+ is unchanged and m2+ is unchanged. b. m1+ increases and m2+ increases. c. m1+ increases and m2+ decreases. d. m1+ increases and m2+ is unchanged. e. m1+ is unchanged and m2+ decreases.

Answer

Brief Explanations:

M1+ includes currency in circulation and demand - deposits (chequing accounts). When Alisha withdraws $1000 from her chequing account to hold as currency, the amount of currency increases and the amount in chequing account decreases. The net effect on M1+ is zero as one component (chequing - account balance) decreases and another (currency) increases by the same amount. M2+ includes M1+ plus other types of deposits like savings deposits. Since the transfer is between components within M1+ and does not involve other components of M2+ outside of M1+, M2+ is also unchanged.

Answer:

A. M1+ is unchanged and M2+ is unchanged.