A Desire by Has No Effect on the Ability of the Banking

question 48

Multiple Choice

A desire by has no effect on the ability of the banking system to create bank deposits, for a given amount of reserves in the banking system.

• A)households to increase the fraction of their money held in the form of currency
• B)banks to delay making loans in expectation of higher future interest rates
• C)firms to reduce their desired level of borrowing from banks
• D)households to hold more money in safety- deposit boxes
• E)the government to increase its level of spending

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Definitions:

Finished Goods

Products that have completed the manufacturing process but have not yet been sold or distributed to the end consumer.