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.