If you transfer $100 from your piggy bank to your savings account
A. M1 decreases by $100.
B. M2 increases by $100.
C. M1 decreases by $100 and M2 increases by $100.
D. M2 decreases by $100 and M1 increases by $100.
E. there is no immediate change in the money supply.

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AnonymousBadger AnonymousBadger · Answer 1 · 2021-05-06T22:41:59+02:00

Answer:

A. M1 Decreases by $100

Explanation:

Since your piggy bank is part of both M1 and M2, but the savings account is only M2, then M1 will decrease by that $100 while M2 will be unchanged.

For a more visual explanation, see the attached image.

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ayoushivt ayoushivt · Answer 2 · 2022-06-13T13:27:46+02:00

M1 decreases by $100 , Option A is the right answer.

An account which a person opens in a bank with the motive of security and getting interest is called a saving account.

It is asked in the question that

If you transfer $100 from your piggy bank to your savings account

What will be the decrease or increase in M1 and M2

As the piggy bank is part of both M1 and M2 ,

the savings account is only M2,

so M1 will decrease by that $100

but M2 will be unchanged.

M1 Decreases by $100

Therefore Option A is the right answer.

To know more about Saving Account.

https://brainly.com/question/3811440

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