Sam Has $500 in Travelerʹs Checks

question 372

Multiple Choice

Sam has $500 in travelerʹs checks. He cashes a $100 traveler check, deposits $150 into his checking account at a Savings and Loan Association, and deposits the remaining $250 into a savings account at a credit union. Immediately,_______________ .

• A) M1 decreases by $400 and M2 increases by $250
• B) M1 decreases by $250 and M2 does not change
• C) M1 does not change and M2 increases by $250
• D) M1 and M2 do not change

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