Answer:
The correct option is A. will go down.
Explanation:
Note: This question is not complete as the answer choices are omitted. The complete question is therefore provided before answering the question as follows:
If a consumer withdraws money from his deposits at the bank (banking leakage), then the monetary base and money supply
Group of answer choices
A. will go down
B. monetary base will go up and money supply will go down
C. will go up.
D. will remain unchanged
The explanation of the answer is now provided as follows:
The monetary base (or M0) is the total amount of a currency that is either in general circulation or retained in the central bank's reserves in the form of commercial bank deposits.
Money supply a country's entire amount of money in circulation or in existence.
Since each money supply and monetary base has an element of money in circulation, both the monetary base and money supply will go down if a consumer withdraws money from his deposits at the bank (banking leakage).
Therefore, the correct option is A. will go down.
