If bank customers decided as a group to pay off their loans and not take out any new loans, ceteris paribus: Group of answer cho

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If bank customers decided as a group to pay off their loans and not take out any new loans, ceteris paribus: Group of answer cho

ices Excess reserves would decrease. The money multiplier would decrease. The money supply would increase. The money supply would decrease.

Business

1 answer:

maksim [4K] · Answer 1 · 2023-02-09T04:45:46+03:00

The money supply in an economy will decrease if the bank customers decided as a group to pay off their loans and not take out any new loans.

<h3>What is a money supply?</h3>

In an economy, the money supply refers to the total amount of money that is circulatingb in such economy.

The rate of use of currency, loan instrument, certificates of deposits etc are determines the level of increase or decrease of the level of money supply in an economy.

Therefore, the Option D is correct.