Question

If the economy starts to boom and loan demand picks​ up, what do you predict will happen to the money​ supply?

Answer 1

In the event that the economy begins to boom and credit demand picks up, the money supply will increment. While in a financial panic, you would anticipate that the cash multiplier will diminish and the cash supply to abatement, which would make the overabundance saves proportion increment. Hence contributors are probably going to build their property of cash.