If People Decide to Hold More Currency Relative to Deposits,the

question 101

Multiple Choice

If people decide to hold more currency relative to deposits,the money supply

• A)falls.The larger the reserve ratio is,the more the money supply falls.
• B)falls.The larger the reserve ratio is,the less the money supply falls.
• C)rises.The larger the reserve ratio is,the more the money supply rises.
• D)rises.The larger the reserve ratio is,the less the money supply rises.

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Definitions:

Simple Interest

Interest figured only on the principal balance, or on the portion of the principal balance that is still due.

Closing Balance

The amount of money in an account at the end of a period, after all transactions have been accounted for.

Bank Account

A financial account maintained by a bank or another financial institution in which the deposits, withdrawals, and balances of a customer are recorded.

Maturity Value

The sum owed to an investor at the conclusion of a fixed-duration investment, encompassing both the original amount invested and the accrued interest.