The Money-Creating Ability of the Banking System May Be Lowered

question 49

Multiple Choice

The money-creating ability of the banking system may be lowered by:

• A)a decrease in the cash balances that people wish to hold.
• B)a fall in the overall rate of inflation.
• C)an increase in the excess reserves.
• D)an increase in total deposits.
• E)an increase in the reserve requirement.

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Definitions:

Stimulant

A substance that raises levels of physiological or nervous activity in the body, often used to increase alertness, attention, and energy.

Marijuana

A psychoactive drug from the Cannabis plant used for medical or recreational purposes.

Nicotine

A potent chemical found in tobacco plants that is highly addictive and stimulates the brain when inhaled or ingested.

Stimulant

A substance that raises levels of physiological or nervous activity in the body, often used to increase alertness, attentiveness, and energy.