If people begin to hold more cash, the money-multiplier process will

Name: If people begin to hold more cash, the money-multiplier process will
Brand: Quizplus
Rating: 4.8 (49 reviews)

Question

Quizplus · Accepted Answer

When people hold more cash, they are essentially removing money from the banking system, which decreases the amount of deposits that banks have available to lend out. This decreases the money-multiplier process, resulting in a decrease in the actual size of the money supply. Therefore, the best choice is C.

If People Begin to Hold More Cash, the Money-Multiplier Process