Which of the Following Best Describes the Chain of Events

question 34

Multiple Choice

Which of the following best describes the chain of events in the money creation process?

• A) The monetary base increases. Banks acquire excess reserves which they loan out, increasing deposits and also the quantity of money. The new deposits then create additional excess reserves.
• B) Currency is drained from the quantity of money into the banking system, where it is lent out. The loans are spent, increasing the currency drain and also the quantity of money.
• C) Desired reserves increase, encouraging banks to seek new deposits. When the new depositors come in, desired reserves decrease and the quantity of money increases.
• D) Low interest rates discourage people from holding currency. When they deposit the currency, interest rates rise, increasing the quantity of money.

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Definitions:

Teenager

An individual in the age group of 13 to 19 years, typically characterized by rapid physical, emotional, and intellectual development.

Young Adult

A person in their late teens to early twenties, often considered a critical developmental stage transitioning from adolescence to full adulthood.

Bulimia

A serious eating disorder characterized by episodes of binge eating followed by purging to prevent weight gain.

Exposure

In health contexts, exposure refers to coming into contact with substances, diseases, or environmental conditions that can lead to health effects.