The Multiple by Which the Chartered Banking System Can Expand

question 61

Multiple Choice

The multiple by which the chartered banking system can expand the supply of money on the basis of excess reserves:

• A)is larger the smaller the desired reserve ratio.
• B)is the reciprocal of the bank's actual reserves.
• C)is directly or positively related to the size of the desired reserve ratio.
• D)will be zero when the desired reserve ratio is 50 percent.

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Definitions:

State Law

Legal regulations and rules that are enacted and enforced by individual states within a country, differing from federal or national laws.

Obtaining Insurance

The process of acquiring a policy that provides financial protection against losses or damages from various risks.

Proportionate Share

A part or portion of something that is divided among parties based on a specific criterion, often related to ownership or contribution.

Multiple Insurance

The practice of holding more than one insurance policy on the same item or person, often to provide additional coverage in case of loss or damage.