In a 100-percent-reserve banking system, if people decided to decrease the amount of currency they held by increasing the amount they held in checkable deposits, then
a. M1 would increase.
b. M1 would decrease.
c. M1 would not change.
d. M1 might rise or fall.
c
Economics
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If banks faced a 100 percent reserve requirement, a $10,000 reduction in banking reserves would decrease the money supply by: a. $1,000,000. b. $100,000
c. $10,000. d. $1,000.
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Countercyclical fiscal policy is designed to moderate the severity of the business cycle
Indicate whether the statement is true or false
Economics