If People Decide to Hold More Currency Relative to Deposits,the

question 123

Multiple Choice

If people decide to hold more currency relative to deposits,the money supply

• A)falls.The larger the reserve ratio is, the more it falls.
• B)falls.The larger the reserve ratio is, the less it falls.
• C)rises.The larger the reserve ratio is, the more it rises.
• D)rises.The larger the reserve ratio is, the less it rises.

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Definitions:

Market System

A market-based economic system where decisions about investment, production, and the allocation of goods are driven by the dynamics of supply and demand, with goods and services' prices being freely determined.

Profits

The financial gain realized when the revenue generated from business activities exceeds the expenses, taxes, and costs associated with maintaining the business.

Demand

The willingness and ability of consumers to purchase goods or services at various prices at a given time.

Industry

A collection of businesses and companies that produce similar goods or offer similar services within an economic sector.