At Christmas,people tend to draw money out of their checking accounts to pay for Christmas presents.As a result,the money multiplier will:

Question

Quizplus · Accepted Answer

When individuals withdraw money from their checking accounts, the reserves of banks decrease, which reduces their ability to lend money. This decrease in lending capacity causes the money multiplier to decrease. Therefore, choice C is the correct answer.

At Christmas,people Tend to Draw Money Out of Their Checking