Which of the following will limit the money creation process to an amount less than the potential amount?
A) Bank pursuit of profits.
B) Increase in currency holdings by the public.
C) Business demand for loans.
D) Increased use of credit cards.

Question

Quizplus · Accepted Answer

Increase in currency holdings by the public will limit the amount of money creation as banks would have less reserves to lend out due to people holding onto more physical cash. The other options do not necessarily directly limit the money creation process.

Which of the Following Will Limit the Money Creation Process