Which of the following is an assumption made in the money-creation process?
A) Banks only lend to borrowers who they know will pay them back.
B) Banks lend out all deposits and hold no reserves.
C) Banks hold all deposits as vault cash.
D) All currency is deposited in a bank.
E) Individuals do not deposit any currency in a bank.
Correct Answer:
Verified
Q104: Sam Black deposits the $5,000 in coins
Q105: A bank has excess reserves of $400,000
Q106: A bank will often hold government securities
Q107: To the extent that a bank holds
Q108: A bank has excess reserves of $1,000,000
Q110: Which of the following is an assumption
Q111: In reality,individuals do not deposit all of
Q112: In a fiat money economy,money is created
Q113: In a fractional reserve banking system,banks
A) are
Q114: If the required reserve ratio is 10
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents