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

The aggregate money supply (M3) includes both currency with the public and demand deposits; therefore, withdrawing cash merely transfers the amount from the deposit component to the currency component, leaving the total sum unchanged. Option (a) is the most tempting error as it incorrectly assumes that only bank deposits constitute money supply, ignoring the fact that cash held by the public is also a primary component. This question tests the core concept of the components of monetary aggregates and how the composition of money can change without affecting the total volume.