The total amount of money defined as M1 (Currency + Demand Deposits) remains unchanged; only the form in which the money is held by the public changes from demand deposits to physical currency.
If you withdraw ₹ 1,00,000 in cash from your Demand Deposit Account at your bank, the immediate effect on aggregate money supply in the economy will be
Asked in UPSC IAS 2020 · Topic: Money & Banking (Money: Functions, Forms, and Measures of Money Supply)
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