Which of the Following Might Limit the Money Creation Process

question 97

Multiple Choice

Which of the following might limit the money creation process to an amount less than the potential amount?

• A)bank pursuit of profits 
• B)public holding some cash 
• C)business demand for loan 
• D)increased use of credit cards

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Definitions:

Annual Cash Flows

The total amount of money being transferred into and out of a business, measured on a yearly basis.

Initial Cash Outflow

The initial expenditure involved in a project or investment, often referring to the sum of money paid at the start.

Required Return

The minimum profit or yield that an investor aims for when investing in a financial instrument or project.

Payback Period

The duration required to recover the cost of an investment, calculated by dividing the initial investment by the annual cash inflow.