An argument in favor of 100 percent reserve banking is that
A) a bank deposit is owned by the depositor, so the bank has no legal right to lend the deposit to someone else.
B) banks should be allowed to lend deposits in order to increase their profits and strengthen the banking system.
C) unregulated institutions would be riskier than regulated fractional-reserve banks.
D) it would limit the precision of the central bank's control over the quantity of money.
A
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An indication that Insurance companies anticipate adverse selection is
a. they do not require a deductible b. they do not classify clients into different risk types according to their claim history c. they classify clients into different risk types according to pre-existing conditions d. they do not require a co-payment
There is some evidence that if inflation can be held to moderate levels of less than what percentage per year, it need not prevent a nation’s real economy from growing at a healthy pace?
a. 2% b. 3% c. 4% d. 5%
Which one of the following factors would reduce the quantity of money balances that households would want to hold?
a. higher prices b. a rise in inflation c. higher nominal interest rates d. an expansion in nominal income (nominal GDP)
In the long run, import quotas increase net exports
a. True b. False Indicate whether the statement is true or false