"Banks hold 100 percent of their customers' deposits as reserves." Is the previous statement correct or not?
What will be an ideal response?
The statement is incorrect. If banks kept all of their deposits as reserves, banks would earn no profit. So banks keep a fraction of their deposits as reserves.
Economics
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Discuss how the interdependence of input markets for labor, capital, and land might affect supply, demand, and wages or rental prices.
What will be an ideal response?
Economics
Because a bank has a very large pool of buyers and savers, it can:
A. act as an intermediary between firms and government. B. provide liquidity to some individuals that deposit funds. C. diversify the risk of saving and borrowing for individuals. D. act in the best interest of society by ensuring there is enough money for people.
Economics