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25. Suppose that individuals want to carry out more illegal transactions, so they decide to hold more of their money as currency and less as checking deposits. If the Fed does not respond, then reserves will _______________ and M1 will ________________ . A. rise; rise. B. rise; fall C. fall; fall D. fall; rise E. fall; remain unchanged The answer is C, but I don't understand why M1 will fall..

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25. Suppose that individuals want to carry out more illegal transactions, so they decide to hold more of their money as currency and less as checking deposits. If the Fed does not respond, then reserves will _______________ and M1 will ________________ . A. rise; rise. B. rise; fall C. fall; fall D. fall; rise E. fall; remain unchanged The answer is C, but I don't understand why M1 will fall.

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