If households in the economy decide to take money out of checking account deposits and hold it as currency, this will initiallyQuestion 4Answera.decrease M1 and decrease M2.b.not change M1 and not change M2.c.not change M1 and increase M2.d.decrease M1 and not change M2.

The banking system increases the money supply by creating Group of answer choicescheckable deposits.currency.checkable deposits and currency.Federal Reserve Notes.

Suppose a country's reserve-deposit ratio (cr) decreases and its monetary base (B) remains constant.Briefly answer the following questions.a. What is the impact on the money multiplier (m)? (1 mark)b. What is the impact on the money supply (M)? (1 mark)c. Suggest one policy the country's central bank can implement to counter the impact of the reserve-deposit ratio change on money supply. The suggested policy must change the country's monetary base (B).

Which of the following evets will cause a reduction in the total amount of reserves in the banking system, all else the same?Group of answer choicesBrad buys something from the grocery store using his ATM card.Geroge withdraws $1,000 for his checking account and pays it to Susan, who deposits it in her at her account in Bank B.Ian withdraws $10,000 from his deposit account and keeps it under his mattress.Someone pays back his loan to Bank A by writing a check on his account at Bank B.

Which statement is true?This is a multi answer question. You can select one or more options as the answer.A.Money multiplier(m) can be equal to 1.B.Money supply (M) will decrease as Currency-deposit ratio (cr) increases.C.Money supply (M) will increase as Reserve-deposit ratio (rr) increases.D.Reserve-deposit ratio (rr) depends on households’ preferences.

Which of the following actions of a central bank would decrease the money supply in the economy?A.Increase the target interest rateB.Decrease the minimum reserve requirement.C.Reduce the interest rate paid on bank reserve.D.Buy bonds through open market operations.