Banks Keep ________ of Checking Deposits as Reserves Because on a Typical

question 99

Multiple Choice

Banks keep ________ of checking deposits as reserves because on a typical day withdrawals ________ deposits.

• A)more than 100%; are much greater than
• B)exactly 100%; are about the same as
• C)less than 100%; are about the same as
• D)exactly 100%; are much greater than
• E)less than 100%; are much greater than

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Definitions:

Riskless Assets

Financial instruments that are considered to have a minimal risk of loss, often exemplified by government bonds or Treasury bills.

Risky Asset

An asset that has a significant degree of uncertainty in its future returns, including the possibility of losing some or all of the original investment.

Market Price

The actual selling price of a product or service in the marketplace at any given time, determined by supply and demand.

Tuition Bonds

Financial instruments issued by educational institutions to fund their operations and expansion, typically repaid from tuition revenues.