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Author Question: How is money destroyed in the banking system?[br][br][b][color=#FBB117]Question ... (Read 105 times)

Lobcity

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on: Jun 30, 2018
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

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Reply #1 on: Jun 30, 2018
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


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Lobcity

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Reply #2 on: Jun 30, 2018
Thank you :)


ngr69

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Reply #3 on: Jun 30, 2018
Happy to help you


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