In a fractional reserve banking system:
A. the Federal Reserve has no control over the amount of money in circulation.
B. the monetary system must be backed by gold.
C. banks can create money through the lending process.
D. bank panics cannot occur.
Answer: C
Economics
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If unemployment is the major problem in the economy, which of the following would be an appropriate monetary policy response?
a. decrease the required reserve ratio b. decrease the interest rate the Fed pays on bank reserves c. buy government bonds d. all of the above
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Small loans to entrepreneurs and small business owners in DVCs are referred to as:
A. human capital development projects. B. microfinance. C. capital flight promotion systems. D. incubator lending.
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