How is money destroyed in the banking ...

[Lobcity]

How is money destroyed in the banking system?

Question 2

A tax is imposed on orange juice. Consumers will bear more of the burden of the tax:
 a. If the demand for orange juice is relatively inelastic and the supply is relatively elastic.
  b. If the demand for orange juice is relatively elastic and the supply is relatively inelastic.
  c. If the supply for orange juice is perfectly inelastic.
 d. none of the above

[ngr69]

Answer to Question 1

The process of money creation can be reversed, and in the process, money is destroyed. When a person pays a loan back to a bank, she usually does so by writing a check to the bank for the amount due. As a result, demand deposits decline, directly reducing the money stock.

Answer to Question 2

a

[Lobcity]

Thank you

[ngr69]

Happy to help you