What are the two significant characteristics of the fractional reserve banking system?
What will be an ideal response?
The two significant characteristics are: (1) banks can create money by lending more than the original reserves on hand. The smaller the amount of reserves viewed as necessary, the larger the amount of money that could be created. (2) The lending policies of fractional reserve banks must be prudent to prevent bank “panics” or “runs” by depositors worried about their funds on deposit at the institutions. The reserves must be able to cover the bank “runs.”
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Indicate whether the statement is true or false
The growth trend in the graph shown is depicted by:
A. A. B. B. C. C. D. D.
According to the law of supply, there is a direct relationship between quantity supplied of pickles and:
A. the number of sellers of pickles. B. costs of cucumbers. C. pickling production technology. D. the price of the pickles.
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a. dishwasher detergent b. chicken c. salad d. a microwave oven e. electricity