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Everything else held constant, a decrease in currency holdings will cause A) the money supply to...

Everything else held constant, a decrease in currency holdings will cause A) the money supply to rise be. B) the money supply to remain constant. C) the money supply to fall. D) checkable deposits to rise.

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Answer #1

According to given statement as there is decrease in currency holding it means the currency is available for the different use like investment, consumption etc

It means it will lead to increase in the money supply

Chekable deposit is a type of demand deposit in which the money is deposited by the different customers in the bank for gaining higher interest rates

So when there is decrease in the currency holding then the checkable deposit will decrease

So the only correct answer here is option A

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