Question

Medal+Fan:


A small local bank has made many loans to several energy companies recently because these companies have had no problem repaying their loans in the past. If energy prices suddenly drop and the companies cannot pay their loans, what is the most likely effect on the local money supply?

A. The bank would not be greatly affected, and the money supply would not change.

B. The bank would have a minor increase in business, and the money supply would increase.

C. The bank would immediately make more loans, and the money supply would increase.

D. The bank would be negatively affected, and the money supply would decrease.

Answer 1

D?

Answer 2

lol thx!