Which of the following factors pose a limit on the ability of commercial banks to increase the quantity of money in circulation by extending new loans? Select one or more: a. the quantity of Central Bank reserves that they own b. the quantity of money that savers lent to them by opening deposits c. the behavior of households and firms, which reduce the quantity of money in circulation by repaying previous loans. d. the availability of profitable lending opportunities in the economy e. the willingness of household and firms to take up new debts at the given interest rate
Which of the following factors pose a limit on the ability of commercial banks to increase the quantity of money in circulation by extending new loans? Select one or more: a. the quantity of Central Bank reserves that they own b. the quantity of money that savers lent to them by opening deposits c. the behavior of households and firms, which reduce the quantity of money in circulation by repaying previous loans. d. the availability of profitable lending opportunities in the economy e. the willingness of household and firms to take up new debts at the given interest rate
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Which of the following factors pose a limit on the ability of commercial banks to increase the quantity of money in circulation by extending new loans?
Select one or more:
a. the quantity of Central Bank reserves that they own
b. the quantity of money that savers lent to them by opening deposits
c. the behavior of households and firms, which reduce the quantity of money in circulation by repaying previous loans.
d. the availability of profitable lending opportunities in the economy
e. the willingness of household and firms to take up new debts at the given interest rate
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