Components of money supply.
Assume you decide to withdraw $100 in currency from your checking account. Illustrate what is the effect on M1? Ignore any actions the bank might take as a result of the withdrawal.
1.M1 remains unchanged.
2.B: M1 decrease by $100 as a result of lower checking deposits.
3.M1 increases by $100 as a result of additional currency in circulation.
4.None of the above occurs.