If people decide to transfer their currency into their bank deposits then,
A)the quantity of money decreases.
B)the actual reserves of banks increase.
C)the quantity of money to increases immediately.
D)interest rates rise.
E)the inflation rate falls.

Question

Quizplus · Accepted Answer

When people transfer their currency into their bank deposits, the actual reserves of banks increase because the deposited money adds to the banks' reserves. This does not immediately change the total quantity of money in the economy, interest rates, or the inflation rate directly.

If People Decide to Transfer Their Currency into Their Bank