Suppose Maria takes P5000 from her savings account and deposits it in her checking account. What is the change in M1 and M2?

The change in M1 and M2 due to Maria's action of transferring P5000 from her savings account to her checking account would be as follows:

1. M1: M1 includes physical currency, demand deposits, traveler's checks, and other checkable deposits. When Maria transfers P5000 from her savings account to her checking account, the money is still in a form that is included in M1. Therefore, there is no change in M1. It remains the same.

2. M2: M2 includes M1 plus savings deposits, time deposits below $100,000, and balances in retail money market mutual funds. Since Maria's action is just a transfer from one account that is included in M2 (savings account) to another account that is also included in M2 (checking account), there is no change in M2. It remains the same.

In conclusion, the transfer of money from a savings account to a checking account does not change the total amount of money in the economy, it just changes where the money is held. Therefore, both M1 and M2 remain unchanged.