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:

Deductive Arguments

A form of reasoning where the conclusion is logically derived from premises that are assumed to be true.

Inductive Arguments

Reasoning that moves from specific instances to a general conclusion, often used to infer probabilities.

Conditional Statements

Logical statements that have an "if-then" structure, indicating that if one condition is true, then a specific result follows.

Claims

Statements or assertions that something is the case, typically without providing evidence or proof.