Which of These Statements Best Describes the Function of Banks

question 13

Multiple Choice

Which of these statements best describes the function of banks as part of the aggregate economy?

• A)Banks take deposits and make loans.
• B)Banks create or reduce the amount of money available in the economy.
• C)Banks reduce moral hazard.
• D)Banks lend money to those business firms most in need of it.

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Definitions:

Due Process

The principle that an individual cannot be deprived of life, liberty, or property without appropriate legal procedures and safeguards.

Fifth Amendment

An amendment to the U.S. Constitution that provides several protections for individuals, including protection against self-incrimination and double jeopardy, and the Takings Clause.

Judicial Review

A process by which courts examine the actions of the executive and legislative branches to ensure they comply with the constitution or legal standards.

Government Bodies

Organized groups or institutions that have authority to make decisions, laws, and policies for a particular area or community.