John and Jane Decide to Go on a Vacation

question 441

Multiple Choice

John and Jane decide to go on a vacation. As a result, they withdraw $2,500 from their savings account to purchase $2,500 worth of traveler's checks. As a result of these changes,

• A) M1 increases by $2,500 and M2 decrease by $2,500.
• B) M1 increases by $2,500 and M2 stays the same.
• C) M1 and M2 stay the same.
• D) M1 decreases by $2,500 and M2 increases by $2,500.