Mr Wong withdraws $500 000 in cash from a deposit-taking company. He then deposits $300 000 with a bank as a time deposit and remits the remaining $200 000 overseas for the settlement of debts.
Which of the following about the money supply M1 and M3 is correct?
A. Both M1 and M3 will increase.
B. Both M1 and M3 will decrease.
C. M1 will remain unchanged and M3 will decrease.
D. Both M1 and M3 will remain unchanged.