The Banking System Is Able to Make New Loans Equal

question 129

Multiple Choice

The banking system is able to make new loans equal to

• A) total legal reserves of the system.
• B) total excess reserves of the system.
• C) total required reserves of the system.
• D) a multiple of total excess reserves of the system.

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Definitions:

Negative Reinforcement

A behavioral concept where the removal of an adverse stimulus strengthens a desired behavior or response.

Pleasant Stimulus

Any event, object, or situation that causes a positive emotional response.

Unpleasant Stimulus

refers to any object, event, or situation that is undesirable or causes discomfort, leading to avoidance behavior in individuals.

Removal

The act of taking something away or eliminating it from a particular location or situation.