Author Question: If people refused to use banks to create checkable deposits, the banking system would: a. not be ... (Read 59 times)

AEWBW · **on:** Jun 30, 2018

If people refused to use banks to create checkable deposits, the banking system would:
a. not be affected in the money creating process.
b. not have a way to loan out excess reserves.
c. be able to expand the money supply by more than the money multiplier indicates.
d. not be able to create new money.
e. not be able to find new borrowers.

Question 2

Real-world accuracy of the money multiplier can be affected by:
a. the amount of loans provided by nonbanks.
b. the way the public divides its holding of M1 between currency and certificates of deposit.
c. the willingness of banks to loan excess reserves.
d. all of these.