Question 18.12

1. For each of the following transactions, what is the initial effect (increase or decrease) on M1? On M2?

  1. You sell a few shares of stock and put the proceeds into your savings account.

  2. You sell a few shares of stock and put the proceeds into your checking account.

  3. You transfer money from your savings account to your checking account.

  4. You discover $0.25 under the floor mat in your car and deposit it in your checking account.

  5. You discover $0.25 under the floor mat in your car and deposit it in your savings account.