If the public switches from using cash for most transactions to using checks instead, then all else equal, the money supply will:
A)increase.
B)decrease.
C)not change.
D)either increase or decrease.

Question

Quizplus · Accepted Answer

With cash in the hands of the non-bank public, there are no effects from the money multiplier. When the cash gets into the banking system as deposits and reserves, the money multiplier applies.

If the Public Switches from Using Cash for Most Transactions