Answer:
M2 decreases and M1 increases.
Explanation:
M1 and M2 are measures of money.
M1 is the narrowest definition of money. It includes currency, travellers check, demand deposit and other checkable deposits.
M2 includes M1 , small denomination time deposit, money market deposit and other assets that can easily be changed into cash easily and at a very little cost.
M3 includes M2, large domination time deposit and less liquid assets.
If $125,000 is withdrawn from the money market funds ,m2 reduces because money market fund is a component of m2.
M1 increases because $125,000 is converted to cash.
I hope my answer helps you.
A 10-story office building is owned by a bank. This would be an example of a chequable deposit on the bank's balance sheet.
An organization's assets, liabilities, and shareholder equity are listed on a balance sheet, which is a financial statement. One of the three primary financial statements used to assess a company is the balance sheet. It offers a snapshot of the assets and liabilities of a corporation as of the publication date.
A balance sheet is a summary of the financial positions of a person or an organization in financial accounting, regardless of whether they are a sole proprietorship, a business partnership, a corporation, a private limited company, or some other type of entity like a government or not-for-profit entity.
Learn more about balance sheet here
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