If there is 100 per cent reserve banking, the money supply is unaffected by the proportion of its money that the public chooses to hold as currency rather than as bank deposits.

Question

Quizplus · Accepted Answer

In 100 per cent reserve banking, all deposits are held as reserves and cannot be used to create new loans or increase the money supply. Therefore, the proportion of money held as currency or deposits by the public does not affect the money supply.

If There Is 100 Per Cent Reserve Banking, the Money