Fractional reserve banking refers to a system where banks
A. deposit a fraction of their reserves at the central bank.
B. accept a portion of their deposits in checkable accounts.
C. grant loans to their borrowing customers.
D. hold only a fraction of their deposits in their reserves.
Answer: D
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The firm in the figure above is in monopolistic competition. The firm has
A) no excess capacity. B) excess capacity of 10 units. C) excess capacity of 20 units. D) excess capacity of 30 units.
Refer to Figure 9-3. What is the value of revenue to foreign producers who are granted permission to sell in the U.S. market when there is a quota?
A) $12 million B) $17.25 million C) $20 million D) $44 million
Banks acquire the funds that they use to purchase income-earning assets from such sources as
A) cash items in the process of collection. B) savings accounts. C) reserves. D) deposits at other banks.
The term consumer sovereignty means that:
A. Government is responsible for protecting consumers' interests B. What is produced is ultimately determined by what consumers buy C. There are no limits on what consumers may buy in a market system D. Producers have strong control over what consumers buy