The Effect on Multiple Deposit Expansion

question 84

Multiple Choice

The effect on multiple deposit expansion

• A)is greater if banks use excess reserves to make loans than if they use them to buy securities.
• B)is greater if banks use excess reserves to buy securities than if they use them to make loans.
• C)is the same whether banks use excess reserves to buy securities or to make loans.
• D)is dependent upon the types of loans banks make and the types of securities banks buy.

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Definitions:

Mechanical Breakdown

The physical process of breaking food into smaller pieces, an essential part of digestion.

Chemical Digestion

The process of breaking down food in the gut into smaller components, using enzymes, so they can be absorbed into the body.

Common Hepatic Duct

A duct in the liver that conveys bile from the liver to the cystic duct and then to the gallbladder.

Bile

Bile is a digestive fluid produced by the liver and stored in the gallbladder that aids in the digestion and absorption of fats in the small intestine.