If People Choose to Hold Some of a Newly Received

question 179

Multiple Choice

If people choose to hold some of a newly received loan as cash instead of keeping it in a checking account, _____

• A) the money supply will not increase as much as it would have had borrowers deposited all of the money in banks.
• B) the money supply will remain unchanged.
• C) the money supply will decrease as much as it would have had borrowers deposited all the money in banks.
• D) the banking system will collapse.
• E) the economy will experience a recession.

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Definitions:

Experimental Hypothesis

An assumption or prediction about the relationship between two variables or the outcome of an experiment designed to be tested through research.

Control Conditions

Conditions in an experiment that are kept constant to accurately test the impact of the experimental factor.

Experimental Procedures

Systematic processes undertaken to discover new knowledge or to test hypotheses by manipulating variables and observing the outcomes.

Correlation Causation

Refers to the logical error of assuming that a correlation between two variables implies that one causes the other.