In a fractional reserve banking system, a banking panic will likely A) lead to a

ID: 1192007 • Letter: I

Question

In a fractional reserve banking system, a banking panic will likely

A) lead to an increase in the currency/deposits ratio

B) be impossible because the system is fundamentally sound.

C) cause people to deposit more into their accounts to help save the bank.

D) increase consumer confidence.

The LM curve slopes upward because

A) as income increases, money demand rises, which increases interest rates.

B) as interest rates rise, the money supply rises, increasing output.

C) as interest rates rise, planned investment must fall, increasing output. D) as income rises, savings rise, increasing output.

LM curve slopes upward because: (A)

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