During a financial crisis hit hard by bank failures,the money supply
A) decreases because people start putting money into savings accounts.
B) increases because people start putting money into savings accounts.
C) increases because people start withdrawing their money from banks.
D) decreases because people start withdrawing their money from banks.
E) increases because people spend more instead of saving more.

Question

Quizplus · Accepted Answer

During a financial crisis, people tend to panic and withdraw their money from banks causing a decrease in the money supply. This can lead to further destabilization of the economy as banks struggle to meet the high demand for cash.

During a Financial Crisis Hit Hard by Bank Failures,the Money