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Economics (AS & A Level) · May / June 2026 · Paper 34 · Question 16

9708Money and banking

What would result in an increase in the volume of bank deposits?

  1. Aan increase in the public's desire to hold cash
  2. Ban increase in government expenditure financed by borrowing from the central bank
  3. Can increase in the proportion of their deposits that banks hold in cash
  4. Dan open market sale of securities by the central bank

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Correct answer: B. an increase in government expenditure financed by borrowing from the central bank

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