Determine overall effect on minimum balance

Reference no: EM1370958

Assume your bank increase its minimum-balance requirement for free checking on checking accounts by $500. You take $500 out of your passbook savings account and put it in your checking account. What is the overall effect on M1 and M2?

Multiple Choice
M1 rises by $500, M2 falls by $500.
M1 is unchanged, M2 is unchanged
M1 rises by $500, M2 is unchanged.
M1 is unchanged, M2 falls by $500.

Reference no: EM1370958

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