If the domino effect occurs as a result of changes in the money supply, what will  most likely  happen as an immediate result of banks having more money to lend?

Answer

If the domino effect occurs due to changes in money supply,bank will immediate have more money to lend causing;

•Interest rates to reduce

•Investments rates to decrease

Explanation

The central banks apply different techniques to increase or reduce the funds in the banking system. This is called monetary policy. The FED influences the supply of money by modifying reserve requirements. They lower the reserve requirements to be able to loan more money which in turn increases overall money supply in the economy of the country. Through rising the bank’s reserves requirement, the Fed is able to lower the size of money supplying in the economy.

B. Cash flows from contingent activities

Explanation: