When Can a Bank Make Loans

question 54

Multiple Choice

When can a bank make loans?

• A) when it has the minimum amount of required reserves
• B) only when it is confident that it can meet all the cash needs of depositors
• C) only when it has deposited all cash at the Federal Reserve
• D) when it has reserves greater than the amount of required reserves
• E) There is not enough information to solve this problem.

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Definitions:

Perception of Quality

The subjective assessment of a product or service's overall excellence or desirability.

Taste Test

A method of evaluating a food item's flavor, texture, and aroma preferences among consumers.

Flavour

The distinctive taste and aroma of food or drink, stemming from its ingredients and preparation methods.

Representativeness Heuristic

A cognitive shortcut used in decision-making that relies on comparing the similarity of current situations to stereotypes or prototypes.