Fractional reserve banking refers to a system in which the depository institution
A) holds reserves equal to its deposits.
B) holds reserves greater than its deposits.
C) holds reserves less than its deposits.
D) holds zero reserves.
C
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Evaluate the following statements: I. The slope of the demand curve is always equal to the elasticity of demand. II. Moving down along a downward-sloping, straight-line demand curve, the elasticity of demand falls
a. (I) and (II) are both true. b. (I) is true and (II) is false. c. (I) is false and (II) is true. d. (I) and (II) are both false.
Keynesian economists believe that
a. prices are very flexible b. changes in the money supply could cause changes in velocity c. real GDP is constant in the short run d. the only motive for demanding money is the transactions demand motive e. the economy operates at full employment