Question

In 1932, the U.S. government imposed a two-cent tax on checks written on deposits in bank accounts. This action would be expected to ______ the currency–deposit ratio and ______ the money supply. decrease; decrease decrease; increase increase; decrease increase; increase

Answer 1

Increase the currency-deposit ratio

Decrease money supply

Step-by-step explanation:

The federal government made the move in order to balance their budget with he notion that with the introduction of the 2 cents on every bank cheques, it will dissuade people from doing bank deposit and switch to currency which will inturn reduce money supply.