Which of the Following Is True

question 97

Multiple Choice

Which of the following is true?

• A)​A majority of U.S.money, whether M1 or M2, is in the form of legal tender.
• B)​If a bank lends out its excess reserves of $90,000, at the time the loan is made, the money supply will increase by $90,000.
• C)​Reserve requirements exist primarily to eliminate bank runs.
• D)​When there are two forms of money available, people prefer to spend the form of money that is more valuable.