In the Nineteenth Century When There Were Often Bank Runs

question 212

Multiple Choice

In the nineteenth century when there were often bank runs caused by crop failures,banks would make relatively fewer loans and hold relatively more excess reserves.By itself,these actions by the banks should have

• A)increased the money multiplier and the money supply.
• B)decreased the money multiplier and increased the money supply.
• C)increased the money multiplier and decreased the money supply.
• D)decreased both the money multiplier and the money supply.

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Definitions:

World Supply

The total amount of a particular good or service that is available for purchase on the global market.

Quadrupled

To increase or be increased fourfold, a term often used in finance, demography, and general quantitative analysis to describe significant growth or expansion.

Market Power

The ability of a company or entity to influence the price and output levels in a market.

Oil Exports

The sale and shipment of crude oil or refined petroleum products from one country to another.