Question

If Takeoff withdraws a $100 bill from his checking account and Quavo deposits another $100 bill in his saving account how much will M1 and M2 change

Answer 1

M2 Will be unchanged

while M1 will decrease by $100

Step-by-step explanation:

M1 will be the cash and coins + checking account + traveler check (it is consideread near-money)

Takeoff Transactions is whitin the M1 metric. Quavo transactions is not included thus, M1 decrease by 100

While M2 includes M1 and it adds the saving deposits thereofre, Quavo operation is included in this concept so we get:

-200 from takoff + 100 from Quavo = zero

No change arise from the combination of this transactions.