In a system of fractional-reserve banking, evenwithout any action by the central bank, the moneysupply declines if households choose to hold_________ currency or if banks choose to hold_________ excess reserves.a. more; moreb. more; lessc. less; mored. less; less
In a system of fractional-reserve banking, evenwithout any action by the central bank, the moneysupply declines if households choose to hold_________ currency or if banks choose to hold_________ excess reserves.a. more; moreb. more; lessc. less; mored. less; less
Chapter12: Money And The Banking System
Section: Chapter Questions
Problem 3DQ
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Question
In a system of fractional-reserve banking, even
without any action by the central bank, the money
supply declines if households choose to hold
_________ currency or if banks choose to hold
_________ excess reserves.
a. more; more
b. more; less
c. less; more
d. less; less
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