Assume that you are interested in earning some return on the idle balances you usually keep in your checking account and decide to buy some money market mutual funds shares by writing a check Comment on the effect of your action (with everything else the same) on M1 and M2 ...

Your actions will reduce your checking account balance ...

Assume that you are interested in earning some return on the idle balances you usually keep in

Question:

Assume that you are interested in earning some return on the idle balances you usually keep in your checking account and decide to buy some money market shares by writing a check. Comment on the effect of your action (with everything else the same) on M1 and M2.
Mutual Funds
Mutual funds are like a pool of funds gathered by different small investors that have simalar investment perspective about returns on their investments. These funds are managed by professional investment managers who act smartly on behalf of the...