Which of the Following Changes Would Clearly Increase the Supply

question 85

Multiple Choice

Which of the following changes would clearly increase the supply of money in the banking system?

• A)an increase in the percentage of money people want to hold as currency, and an increase in the fraction of deposits banks want to hold as reserves
• B)an increase in the percentage of money people want to hold as currency, and a decrease in the fraction of deposits banks want to hold as reserves
• C)a decrease in the percentage of money people want to hold as currency, and a decrease in the fraction of deposits banks want to hold as reserves
• D)a decrease in the percentage of money people want to hold as currency, and an increase in the fraction of deposits banks want to hold as reserves

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Definitions:

Reference

An act of mentioning or alluding to something or someone, often used for validation, citation, or acknowledgment in academic or professional contexts.

Instrument

is a legal document formally executed and capable of creating rights and obligations, such as contracts, wills, or checks.

Draft

A preliminary version of a written document or an order for a bank to pay a specified sum from the drawer's account.

Unconditionally

Without any conditions or limitations.