Cachet Co. has the following information: Adjusted balance in Allowance for Doubtful Accounts $ 3,000 Bad debts estimated for the current year 8,000 Unadjusted credit balance in Allowance for Doubtful Accounts 4,000 No recoveries were recorded during the year. What was the amount of accounts written off during the year?

Option (d) is correct.

Explanation:

If people decided to hold less currency relative to deposits, then the money supply rises in the economy. Since large portion of currency they deposited into banks. As these deposits increases money supply in the economy through money multiplier.

Fed could try to neutralize the impact of this factor by selling treasury bonds to public. Therefore, money supply decreases to some extent.