Which of the Following Is an Assumption Made in the Money-Creation

question 48

Multiple Choice

Which of the following is an assumption made in the money-creation process?

• A) Banks only lend to borrowers who they know will pay them back.
• B) Banks lend out all deposits and hold no reserves.
• C) Banks hold all deposits as vault cash.
• D) All currency is deposited in a bank.
• E) Individuals do not deposit any currency in a bank.

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Definitions:

Complex Solutions

Solutions to equations that include imaginary numbers, often involving the square root of a negative number.

Quadratic Equation

An equation of the form ax^2 + bx + c = 0, where a, b, and c are constants, and a is not equal to 0.

Real Solutions

Real solutions refer to solutions of equations that are real numbers, not involving imaginary or complex numbers.

Quadratic Form

An expression in which the highest power of variables is squared, typically written in the form ax^2 + bx + c.