Multiple Choice
If most individuals accept paper currency in transactions,and paper currency is "backed by" gold held by commercial banks,then banks can safely issue
A) no more paper currency than the value of the gold they hold.
B) more paper currency than the value of the gold they hold.
C) as much paper currency as they please.
D) paper currency equal to a fraction of the gold they hold.
E) paper currency equal to the bank's commercial debt divided by their gold reserves.
Correct Answer:
Verified
Correct Answer:
Verified
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