Solved

If a Portion of the Loans Extended by Commercial Banks

Question 65

Multiple Choice

If a portion of the loans extended by commercial banks is taken as cash rather than as checkable deposits, the maximum money-creating potential of the commercial banking system will


A) be equal to twice the reciprocal of the reserve ratio.
B) be unaffected.
C) increase.
D) decrease.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents