Under Which of the Following Circumstances Is the Size of the Effect

question 95

Multiple Choice

Under which of the following circumstances is the size of the effect of a given deposit of cash into a demand deposit account on the money supply greater?

• A)the smaller the fraction of money people want to hold as currency, and the greater the fraction of deposits banks want to hold as reserves
• B)the greater the fraction of money people want to hold as currency, and the greater the fraction of deposits banks want to hold as reserves
• C)the greater the fraction of money people want to hold as currency, and the smaller the fraction of deposits banks want to hold as reserves
• D)the smaller the fraction of money people want to hold as currency, and the smaller the fraction of deposits banks want to hold as reserves

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