Identify the correct statement regarding a fractional reserve banking system.
a. Only a fraction of the banks in the system are allowed to create money
b. Only a fraction of the banks in the system have reserves.
c. The claims outstanding against the bank are only a fraction of the bank's total reserves.
d. Each bank must deposit a fraction of its reserves with the Federal Reserve Bank.
e. Bank reserves represent only a fraction of bank deposits.
e
You might also like to view...
Once the categories of income are totaled, the sum is called
A) GNP and is not equal to GDP. B) "total income earned" and is equal to GDP. C) "net domestic product at factor cost" and is equal to GDP. D) "GDP measured by the income approach." E) "net domestic product at factor cost" and is not equal to GDP.
Explain the big tradeoff. What idea of fairness has been developed to deal with it?
What will be an ideal response?