Which of the Following Statements Is Correct

question 160

Multiple Choice

Which of the following statements is correct?

• A) The actual reserves of a commercial bank equal its excess reserves minus its required reserves.
• B) A bank's liabilities plus its net worth equal its assets.
• C) When borrowers repay bank loans, the supply of money increases.
• D) A single commercial bank can safely lend a multiple amount of its excess reserves.

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Definitions:

Encoding Specificity

The hypothesis that when information is stored in memory, it is not recorded in its original form but translated (“encoded”) into a form that includes the thoughts and understanding of the learner.

Levels of Processing

A theory suggesting that the depth (shallow to deep) of mental processing affects memory recall, with deeper levels of processing leading to more durable memory traces.

Flashbulb Memory

A highly detailed and vivid memory of a significant or shocking event, as if it has been captured by a camera's flash.

Retrieval Cues

Stimuli or pieces of information that help in the recovery of stored memories.