Which of the following correctly describes fractional reserve banking?
A. The federal government only insures a fraction of the deposits at most banks.
B. Banks keep a fraction of their loans with other banks to maintain the quality of their loan portfolio.
C. Banks can loan out all but a small fraction of its own money, but must hold all money deposited at the bank on reserve in bank vaults.
D. Banks can loan out all but a fraction of its own money, but must hold all money deposited at the bank on reserve in bank vaults.
Answer: D
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Some goods, such as lighthouses, can switch between being public goods and being private goods depending on the circumstances
a. True b. False Indicate whether the statement is true or false
William engages in an activity that influences the well-being of a bystander. In which of the following instances does an externality arise?
a. The impact of William's activity on the bystander is adverse, and William compensates the bystander accordingly. b. The impact of William's activity on the bystander is adverse, but William fails to compensate the bystander. c. The impact of William's activity on the bystander is beneficial and the bystander compensates William accordingly. d. Externalities arise in all of the above cases.
If government purchases are $400 million, taxes are $700 million, and transfers are $200 million, which of the following is true?
A) Public saving is $500 million. B) The budget deficit is $100 million. C) The budget deficit is $500 million. D) Public saving is $100 million.
The factor of production called "labor" can be defined as the:
A. time spent by employees in the production of goods, but not services. B. number of worker-hours a business uses at a given time. C. fraction of total costs spent on people. D. number of people a business has access to at any given time.