Banks Retain Only a Small Portion of Their Deposits on Reserve

question 52

Multiple Choice

Banks retain only a small portion of their deposits on reserve in

• A) a partial demand deposit arrangement.
• B) a fractional reserve banking system.
• C) a banking and reserve lending system.
• D) a replacement reserve agreement.

---

Definitions:

Guaranteed Pay

An employment compensation structure where an employee is assured a specific amount of payment, regardless of performance or company profit.

Credit Union

A member-owned financial cooperative that provides traditional banking services, often with more favorable terms.

Compound Interest

Interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan.

Future Value

The estimated amount of money an investment is expected to be worth at the end of a specified period, accounting for interest or capital gains.