A Desire by ________ Has No Effect on the Ability

question 45

Multiple Choice

A desire by ________ has no effect on the ability of the banking system to create bank deposits,for a given amount of reserves in the banking system.

• A)banks to delay making loans in expectation of higher future interest rates
• B)households to increase the fraction of their money held in the form of currency
• C)households to hold more money in safety-deposit boxes
• D)the government to increase its level of spending
• E)firms to reduce their desired level of borrowing from banks

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Definitions:

Gross Margin Ratio

A financial metric that measures the percentage of revenue that exceeds the cost of goods sold, indicating the profitability of a company's core activities.