Suppose the Public Decides to Hold More Currency and Fewer

question 54

Multiple Choice

Suppose the public decides to hold more currency and fewer deposits in banks. Which of the following best describes the effects of this decision?

• A)Bank reserves decrease, and the money supply eventually decreases.
• B)Bank reserves decrease, but the money supply does not change.
• C)Bank reserves increase, and the money supply eventually increases.
• D)Bank reserves increase, but the money supply does not change.

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Definitions:

Tabula Rasa

The idea that individuals are born without built-in mental content, and all knowledge comes from experience or perception.

Piaget

Jean Piaget was a Swiss psychologist known for his pioneering work in child development, focusing on the nature of children's thinking and learning processes.

Predisposition

A natural inclination or tendency to behave in a certain way or to develop a particular condition or disease.

Intellectual Charge

The stimulation or engagement of the mind through learning, thinking, and intellectual activity.