Fractional reserve banking is the system that
A) allows banks not to insure their deposits.
B) allows banks not to join the Federal Reserve System.
C) limits banks' activities from crossing state lines.
D) allows banks to keep smaller reserves than their deposits.
Correct Answer:
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Q1: Assume that the currency-deposit ratio is 0.3
Q3: High-powered money consists of
A)bank reserves plus currency
Q4: Vault cash is equal to $2 million,deposits
Q5: The money supply is $10 million,currency held
Q6: The currency-deposit ratio is determined by
A)banks.
B)the public.
C)the
Q7: Suppose there was a banking crisis.The money
Q8: Assume that the currency-deposit ratio is 0.2
Q9: Assume that the reserve-deposit ratio is 0.4.The
Q10: Which of the following are depository institutions?
A)The
Q11: In a fractional reserve banking system with
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