Banks do not need to keep all of their deposits on hand as reserves because
A) only a fraction of deposits are withdrawn at any one time.
B) FDIC protects banks from excessive withdrawal demands.
C) there is too much risk of bank robberies.
D) they can always generate new reserves through the money creation process.
Answer: A) only a fraction of deposits are withdrawn at any one time.
You might also like to view...
To show the values of an economic variable for different groups in a population at a point in time, it is best to use a
A) trend-section diagram. B) cross-section graph. C) linear graph. D) time-series graph. E) scatter diagram.
Refer to the figure above. What is the opportunity cost of producing one Web site?
A) 0.2 computer programs B) 5 computer programs C) 12 computer programs D) 60 computer programs
Your text refers to airlines as "The Kings of Price Discrimination." Why is price discrimination common in the airline industry?
What will be an ideal response?
Which of the following statements is (are) correct? Keynesians criticize the new classical theory because
a. the new classical model cannot explain changes in expectations. b. of the contracting market characterization of the labor market. c. the rational expectations assumption ascribes an extreme and unrealistic availability of information to market participants. d. All of the above