Fractional reserve banking refers to a banking system in which
A. bank reserves are only a fraction of required reserves.
B. bank reserves are only a fraction of total deposits.
C. bank loans are less than bank reserves.
D. bank deposits are less than bank reserves.
Answer: B
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Each of the following is an example of capital, except
A. an office building. B. gold. C. an assembly line. D. a computer system
Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
How might unemployment benefits create a moral hazard problem?
What will be an ideal response?
In the long run, imports will most likely be paid for with
A) exports. B) the sale of real and financial assets. C) the extension of credit. D) higher domestic unemployment.