The best way to reduce the supply of money in the economy is to?

a

increase the liquidity ratio

b

increase the number of bank-notes and cheques produced

c

decrease treasury bills

d

liberalize access to credit

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Correct Option
a

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Discussions (3)

OseisKate
3 years ago

It is correct because in my own understanding, liquidity ratio refers to the amount of money left with the bank after handing out loans. If the amount of money left (also called reserve ratio) is high, then there would be less loans given out, causing decrease in supply of money.

Hopeheart
6 years ago

Is wrong. Why?
Because liquidity ratio mean the total or aggregate amount of cash at hand, they can be called asset, reason they had value.

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