The Chartered Banking System Can Lend by a Multiple of Its

question 86

Multiple Choice

The chartered banking system can lend by a multiple of its excess reserves primarily because:

• A)its reserves are on deposit with the Bank of Canada
• B)its reserves are highly liquid assets.
• C)it loses reserves when it extends credit.
• D)its reserves are fractional.

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Definitions:

Infect Bacteria

The process by which harmful bacteria invade an organism, possibly causing disease.

Sex Pilus

A thin, tube-like structure produced by bacteria that facilitates the transfer of DNA between two cells.

Cellular Reproduction

The process by which cells divide to produce new cells, essential for growth, development, and repair of tissues in living organisms.

Conjugation

Mechanism of horizontal gene transfer in which one prokaryote passes a plasmid to another.