Grace receives a remittance of HK$530 000 from overseas. She saves HK$500 000 of the total amount as time deposits in a restricted licence bank and the rest as demand deposits in a licensed bank.
What will be the immediate effect of the above actions on the money supply of Hong Kong?
A. M1 will increase by HK$30 000 and M2 will increase by $530 000.
B. M1 will increase by HK$30 000 and M3 will increase by $500 000.
C. M2 will increase by HK$30 000 and M3 will increase by $500 000.
D. M2 will increase by HK$30 000 and M3 will increase by $530 000.