In the fractional reserve banking system
A. only a fraction of bank assets at any one time may be used to create money.
B. only a fraction of a bank's liabilities must be held as reserves to meet withdrawals at any one time.
C. a bank receives only a fraction of the reserve it needs at any given time.
D. All of the choices are correct.
B. only a fraction of a bank's liabilities must be held as reserves to meet withdrawals at any one time.
You might also like to view...
The table below describes the relationship between the number of workers hired by a call center each hour and the number of calls the call center can make each hour. The call center has only 1 telephone. The telephone costs the firm $5/hour (regardless of how many calls are made), and each worker is paid $10 per hour.Calls PerHourNumber ofTelephonesPer HourNumber ofWorkersPer Hour0$0$01$30$1002$40$1603$60$1904$100$2105$150$2206$210$225If the price of a telephone increases to from $5 to $10 an hour and nothing else changes, then:
A. total cost would not change. B. marginal cost would not change. C. fixed cost could not change. D. marginal cost would increase by $5 at every level of output.
For much of the history of aid, ____________ has been a driving force in decisions about how much to give in foreign aid.
A. the finance gap of receiving countries B. the opportunity cost of investing in developing nations C. the interest rate in the home country D. political strategy
Fiscal policy would be more effective if:
A. the government could change taxes and expenditures rapidly. B. potential income was unknown. C. the size of the government debt didn't matter. D. crowding out occurred more often.
You want to hire a law firm to represent you from which you derive benefit. The law firm incurs costs from providing this service. As long as marginal benefits are greater than marginal costs, value is
A. not maximized because fewer hours of services are provided. B. minimized. C. not maximized because more hours of services are provided. D. maximized.