Please Answer Thoroughly!

13. Some people claim that recessions are caused by excessive saving on the part of the public.When people decide to save more, they are deciding to buy less now.Won't that cause some goods to go unsold?And won't that cause producers to reduce their levels of output, laying people off and thus reducing their incomes, causing these people to buy less, thus setting off a downward spiral?How would you evaluate the claim that those who spend lavishly create prosperity while those who save bring on recessions?(Be careful since without reading this chapter your natural inclination is to miss the point of this question.Rely on the chapter rather than what you think you know from reading newspapers and articles about the economy.)

14. How does the withdrawal of currency from checking accounts affect the money stock?How does it affect a bank's reserves?How does this

affect the bank's ability to make loans?What effect might this withdrawal consequently have on the money stock?