If a Banking Transaction Created New Excess Reserves in the Banking

question 149

Multiple Choice

If a banking transaction created new excess reserves in the banking system,what would the impact be on the amount of loans made by banks and the money supply?

• A)an increase in the amount of loans made by banks and a decrease in the supply of money
• B)an increase in the amount of loans made by banks and an increase in the supply of money
• C)a decrease in the amount of loans made by banks and a decrease in the supply of money
• D)a decrease in the amount of loans made by banks and an increase in the supply of money

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Definitions:

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