Which of the following is true of a fractional reserve banking system?
A) Banks must hold all of depositors' deposits in their vaults
B) Banking is only a fraction of the services banks provide to their customers
C) Banks lend out part of their depositors' deposits
D) The reserve ratio is 100%
E) Banks may not hold excess reserves
Correct Answer:
Verified
Q30: M2 includes
A)M1,plus savings and time deposits of
Q31: If the reserve ratio is 10% and
Q32: M1 includes
A)Currency and coins in circulation,traveler's checks,demand
Q33: If the Open Market Committee of the
Q34: The basic money supply is
A)Composed of small
Q36: Excess reserves refer to
A) Reserves that
Q37: To reduce inflationary pressures,the Federal Reserve authorities
Q38: The Gramm-Leach-Bliley Act allows banks to
A)Sell insurance
B)Underwrite
Q39: The money multiplier is
A)1/r
B)Er
C)R/E
D)E/r
E)1+1/Er
Q40: Money is "liquid" because
A)It loses value with
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