Preference

Question: Other things remaining unchanged, what is likely to be a consequence of an increase in net cash withdrawals from the commercial banks?

  1. a.
    an inflationary spiral
  2. b.
    an increase in the cash reserves of the commercial banks to lend
  3. c.
    an increase in the liquidity of the commercial banks
  4. d.
    a restriction in the ability of the commercial banks to lend
  5. e.
    None of these
Answer: d
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