At Christmastime, individuals choose to hold more cash and fewer deposits to facilitate their Christmas shopping. This condition will
A) increase the money supply, for people will be spending more money.
B) have no effect on the money supply because people are just exchanging one form of money (deposits) for another form (cash).
C) reduce the money supply because there will be a drain of reserves out of the banks.
D) reduce the money supply, for all that cash is spent on Christmas presents.
C
Economics
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