A System in Which Banks Hold Reserves Whose Value Is

question 214

Multiple Choice

A system in which banks hold reserves whose value is less than the sum of claims on those reserves is called

• A) speculative banking.
• B) leveraged banking.
• C) fractional reserve banking.
• D) international banking.

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Definitions:

Groupthink

A psychological phenomenon that occurs within a group of people when the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome.

Self-Serving Bias

The common habit of a person taking credit for positive events or outcomes, but blaming outside factors for negative events.

Fundamental Attribution Error

The tendency to overemphasize personal characteristics and ignore situational factors when judging others' behavior.

Groupthink

A psychological phenomenon that occurs within a group of people, where the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.