Answer the following statements true (T) or false (F)

1) When commercial banks retire outstanding loans, the supply of money is increased.
2) Commercial banks monetize claims when they sell securities to Federal Reserve Banks.
3) The banking system can lend by a multiple of its excess reserves because lending does not
result in a loss of reserves to the banking system as a whole.
4) The monetary multiplier and the spending multiplier are two ways of referring to the same
concept.


1) F
2) F
3) T
4) F

Economics

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