In a System with Fractional-Reserve Banking

question 110

Multiple Choice

In a system with fractional-reserve banking:

• A) all banks must hold reserves equal to a fraction of their loans.
• B) no banks can make loans.
• C) the banking system completely controls the size of the money supply.
• D) all banks must hold reserves equal to a fraction of their deposits.

---

Definitions:

Predict A Person's Behaviour

The process of forecasting an individual's actions based on observations, patterns, or knowledge about their past behavior or predispositions.

Fishbein

Refers to the Fishbein model, a theory of attitude formation and change, named after psychologist Martin Fishbein.

Self-Perception Theory

Bem’s idea that we gain knowledge of ourselves only by making self-attributions; for example, we infer our own attitudes from our own behaviour.

Own Behaviour

Refers to an individual's actions or conduct, often considered in the context of how it is influenced by or affects social interactions.