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:

Existing Duty

An obligation that a party is already legally bound to under the terms of a contract or by law.

Quantum Meruit

A legal principle where a person is compensated for services or goods provided when no contract exists, based on the value of the work done.

Satisfaction of Debt

The fulfillment or payment of a debt in its entirety, releasing the debtor from further obligations.

Common Law

A legal system based on customs and court rulings rather than written laws, where the principle of precedent guides future judicial decisions.