If you withdraw Rs. 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
Explanation
The immediate effect on aggregate money supply in the economy, if you withdraw Rs. 1,00,000 in cash from your Demand Deposit Account at your bank, will be "No change".
Reason: Aggregate money supply refers to the total amount of money circulating in the economy, including both cash and deposits in commercial banks. - M3 = M1 + Time Deposits with Banks Where: - M1 = Currency in circulation + Demand deposits with banks + Other deposits with the central bank
When you withdraw cash from your demand deposit account, you are simply converting your deposit (which is part of the money supply) into currency (also part of the money supply).
The total amount of money in the system remains the same, just the composition (ratio of cash to deposits) changes.