Cash is deposited into a demand deposit account. Which of the following situations leads to the greatest effect on the money supply?

Question 33 options:

the smaller the fraction of money people want to hold as currency, and the greater the fraction of deposits banks want to hold as reserves

the greater the fraction of money people want to hold as currency, and the greater the fraction of deposits banks want to hold as reserves

the greater the fraction of money people want to hold as currency, and the smaller the fraction of deposits banks want to hold as reserves

the smaller the fraction of money people want to hold as currency, and the smaller the fraction of deposits banks want to hold as reserves

How is the opportunity cost of holding money determined?

Question 34 options:

by consumer income levels

by the amount of reserves in the banking system

by the tax rates

by market rates of interest

What happens to the demand for money when a person's income increases?

Question 35 options:

It shifts to the right for transaction purposes.

It shifts to the left for transaction purposes.

It shifts to the left because of precautionary reasons.

It will remain unchanged.