An Important Effect of Fractional Reserve Banking Is That Bankers

question 79

Multiple Choice

An important effect of fractional reserve banking is that bankers have

• A)little control over total reserves.
• B)total control over the amount of lending in the economy.
• C)no control over the amount of reserves in the banking system.
• D)some discretion over the money supply.

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Definitions:

Contract Discharge

The conclusion of a contractual obligation, either through completion of the contract terms, mutual agreement, or other legal methods.

Novation

The process of substituting a new contract or obligation for an old one, requiring the agreement of all parties involved.

Three-Part Test

A methodological framework consisting of three criteria used to evaluate the validity, legality, or effectiveness of something.

Tendered Performance

The act of offering or presenting for acceptance a performance of obligations under a contract.