At One Time,people in a Certain Country Had No Access

question 28

Multiple Choice

At one time,people in a certain country had no access to banks;they relied exclusively on currency.Then,a fractional-reserve banking system was created.As a result,the money supply

• A)increased.The central bank could have reduced the size of this increase by buying bonds.
• B)increased.The central bank could have reduced the size of this increase by selling bonds.
• C)decreased.The central bank could have reduced the size of this decrease by buying bonds.
• D)decreased.The central bank could have reduced the size of this decrease by selling bonds.

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Definitions:

Ending Balance

The total amount remaining in an account at the conclusion of a reporting period or after a specific transaction has been completed.

Compounded Annually

Refers to the process where the interest earned on an investment is added to the principal sum at the end of each year, then interest for the next period is calculated on the new principal.

Rate Of Return

The gain or loss of an investment over a specified period, usually expressed as a percentage of the investment's initial cost.

Invested

The act of allocating resources, usually money, into something to earn a return or achieve a financial goal.