The Commercial Banking System Can Lend by a Multiple of Its

question 162

Multiple Choice

The commercial banking system can lend by a multiple of its excess reserves primarily because

• A) its reserves are on deposit with the Federal Reserve Banks.
• B) its reserves are highly liquid assets.
• C) it loses reserves when it extends credit.
• D) its required reserves are fractional.

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Definitions:

In-Group Bias

The tendency to favor individuals within our own group over those from outside groups.

Out-Group Bias

The tendency to have negative views or prejudices towards people who are perceived as belonging to a different group than one's own.

Discrimination

Unjust or prejudiced treatment of different categories of people, especially on the grounds of race, age, or sex.

Frustration

The feeling of being upset or annoyed, especially because of inability to change or achieve something.