Which of the Following Statements Is Correct

question 1

Multiple Choice

Which of the following statements is correct?

• A) When borrowers repay bank loans, the money supply is increased.
• B) When borrowers take out bank loans, the money supply is decreased.
• C) A single bank can legally lend an amount equal to its total reserves.
• D) A bank can grant loans to customers only if it has excess reserves.

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Definitions:

People's Republic of China

A sovereign state in East Asia, known as the world's most populous country, governed by the Communist Party of China.

Chinese Civil War

A conflict between the Communist Party of China and the Nationalist Party (Kuomintang) from 1927 to 1949, leading to the establishment of the People's Republic of China.

Independence

The state of being free from outside control or not being subject to another's authority.

Great Britain

An island comprising England, Scotland, and Wales, and is located off the northwestern coast of mainland Europe.