[RAINii]

so.. i bombed my 2500 test (no biggie, there's a 5000 & 10000 test after it)
but i got stuck on this while doing corrections for it
can some care to explain this to me?

[this is what i have so far..=,=']
11. If the public�s desire to hold money as currency increases, what will the impact be on the banking system?
A. Unemployment is typical made by a growth in GDP.
B. A decrease in aggregate supply would
C.
D. Banks would be less, not more able to expand credit.
E. This is correct because

The answers (the correct one is E)
A. Banks would be more able to reduce unemployment.
B. Banks would be more able to decrease aggregate supply.
C. Banks would be less able to decrease aggregate supply/
D. Banks would be more able to expland credit.
E. Banks would be less able to expland credit.


as you can see, i usually bs my way thru class but i didn't put in as much effort this time
I sleep thru class.. i learned the complete AD/AS graph for the first time in 15 min before the test ~_~



ps. there really should be a homework help section.. i feel my thread will be a bit strangely looked upon here -,-

.. i see my thread is moved; lol

[i'm lagging yo]

i dont' understand the question... why are there two sets of A,B,C's?

[saera]

From what I remember (I actually may be totally wrong...so you decide)...

if people dont put money in the banks, banks dont have enough cash in their reserves to loan out money. So banks can't expand credit. Their ability to loan out money will decrease. I dont remember the exact terms for it, but something about reserve ratio? requirement? 1/rr...

[RAINii]

the first set of abc's are my correction. the second set is the actual answer to it.
^ haha; i turned it in today earlier, yup, basically, what you said

[joonleex]

god this thing looks confusing @_____@. Sorry i cant help you >.>. *bangs my head*