When There Is a High Degree of Trust in a Country's

question 21

Multiple Choice

When there is a high degree of trust in a country's banking system, the amount of cash held out of banks relative to deposits in banks would tend to be what?

• A)The amount of cash held out of banks would be close to zero.
• B)The amount of cash held out of banks would be relatively low.
• C)The amount of cash held out of banks would likely be unaffected.
• D)The amount of cash held out of banks would be relatively high.

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Definitions:

Japanese Yen

The official currency of Japan, symbolized as ¥ and known in international finance as JPY.

Goods and Services Deficit

A situation where the value of a country's imports of goods and services exceeds the value of its exports.

Germany

A country in Central Europe known for its rich history, cultural heritage, and significant economic contributions.

Equilibrium Exchange Rate

The equilibrium exchange rate is the price at which the demand for a currency exactly matches its supply in the foreign exchange market, leading to balance without the need for official intervention.