One Problem for Economic Stability Is That in a Period

question 183

Multiple Choice

One problem for economic stability is that in a period of inflation,

• A)banks will be tempted to increase lending in order to increase profits.
• B)banks will be tempted to decrease lending in order to increase profits.
• C)profit-oriented banks will tend to hold excess reserves and decrease the money supply.
• D)deposits will decrease and banks will have to reduce lending.

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Definitions:

Precipitation

Any water substance, whether solid or liquid, that comes down from the clouds and touches the Earth, encompassing rain, snow, sleet, and hail.

Greenhouse Effect

The warming of Earth's surface and lower atmosphere caused by the presence of certain gases in the air which trap energy from the sun.

Earth

The third planet from the Sun, uniquely supporting a vast diversity of life forms due to its suitable environmental conditions.

Mountain Biomes

Ecosystems found in high elevation regions, characterized by diverse climates and biotic communities depending on altitude.