In the Fractional Reserve Banking System

question 8

Multiple Choice

In the fractional reserve banking system:

• A)half of the total money supply is held in reserves as currency
• B)a fraction of the total money supply is held in reserves as currency.
• C)an amount equal to the total money supply is held in reserves as currency.
• D)no fraction of the total money supply is held in reserves as currency.

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Definitions:

Indirect Pressure

Influences or suggestions made in a subtle way to sway someone's decision or behavior without direct command.

Conformity

The process of aligning one's attitudes, beliefs, and actions with the norms of a group or the expectations of society.

Compliance

The act of conforming, submitting, or adapting one's behavior to match with demands, requests, or regulations from others, often used in a legal or regulatory context.

Lowball Procedure

The lowball procedure is a psychological technique used in persuasion and sales where an initially favorable offer is made, only to have terms less favorable to the buyer introduced later.