Joan Begins the Month with $100 in Her Checking Account

Multiple Choice

Joan begins the month with $100 in her checking account. When she receives a paycheck for $1,200 on the 5th of the month, she uses that paycheck to put $1,000 in her checking account, takes $80 in cash, and deposits $120 in her savings account. During the month, she spends $550 on rent and utilities, $30 on household items, $10 on a T-shirt, and $350 on food, leaving a balance of $240 in her checking account. Based on the given information, which statement is true?

A) The $100 and the $220 in Joan's savings account are part of M1.
B) When Joan deposits her paycheck and deposits $120 in her savings account, M1 falls by $120.
C) Joan's deposit into her checking account increases M1 by $1,000.
D) M1 falls as Joan spends her money.