In the Banking System Today, the Reserves Banks Hold Against

question 22

Multiple Choice

In the banking system today, the reserves banks hold against their deposit liabilities must take one of two forms. They are

• A) vault cash and deposits at the Fed.
• B) vault cash and checkable deposits.
• C) currency in circulation and checkable deposits.
• D) gold and vault cash.

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Definitions:

Transference

In psychotherapy, the phenomenon where patients project feelings or attitudes from past relationships onto the therapist.

Halo Effect

A cognitive bias where the perception of one positive trait leads to the assumption of other positive traits in an individual.

Upward Counterfactual

Thinking about how a situation could have turned out better, often leading to feelings of regret.

Magical Thinking

Believing that one’s thoughts, wishes, or desires can influence the physical world or that events are connected in ways that defy scientific principles.