If the public decides to hold less currency and more deposits in banks, bank reserves
a. decrease and the money supply eventually decreases.
b. decrease but the money supply does not change.
c. increase and the money supply eventually increases.
d. increase but the money supply does not change.
c
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A firm has an incentive to decrease supply now and increase supply in the future if it expects that
A) the price of its product will be lower in the future than it is today. B) more firms will enter the market in the future. C) the price of its product will be higher in the future than it is today. D) the prices of inputs used to produce the product will rise in the future.
M1 is comprised of currency held outside banks + traveler's checks + __________
A) credit cards B) savings deposits C) gold D) checkable deposits E) money market mutual funds