Which of the following changes would clearly decrease the supply of money in the banking system?

Question

Quizplus · Accepted Answer

An increase in the percentage of money people want to hold as currency reduces the amount of money available for banks to use as reserves for creating more money through loans. Similarly, an increase in the fraction of deposits banks want to hold as excess reserves means banks are lending out a smaller portion of their deposits, both of which decrease the supply of money in the banking system.

Which of the Following Changes Would Clearly Decrease the Supply