Which of the Following Has Proved to Be Spectacularly False

question 91

Multiple Choice

Which of the following has proved to be spectacularly false, at least recently?

• A)​as an expansion proceeds, people will hold no more cash 
• B)​as an expansion proceeds, banks will hold no more excess reserves 
• C)​the oversmplified money multiplier formula is predicated on two critical assumptions 
• D)​All of the above are false.

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Definitions:

Cheques

A written, dated, and signed instrument that contains an unconditional order directing a bank to pay a definite sum of money to a payee.

Deposit

A sum of money placed or kept in a bank account, often to gain interest.

Balance

Balance refers to the amount of money in a financial account, or the equality between the sum of debits and credits in an account.

Account

A record or statement of financial expenditure and receipts relating to a particular period or purpose or the contractual arrangement under which an entity manages the funds of another.