Economics 9708 · AS & A Level · Monetary policy

Monetary policy — practice question

Which change is likely to cause the domestic money supply to fall?

  • ABanks being allowed to hold a lower liquidity ratio.
  • BIndividuals choosing to hold more money in the form of idle balances.
  • CThe government financing its budget deficit by borrowing from the banking sector.
  • DThe government increasing its borrowing from other countries.

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