Because the Banking System Operates Using Fractional Reserves

question 3

Multiple Choice

Because the banking system operates using fractional reserves,

• A) the money multiplier is greater than one.
• B) excess reserves are equal to zero.
• C) required reserves are equal to 100 percent.
• D) banks can loan out only their required reserves.

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Definitions:

Cell Body

The central part of a neuron that contains the nucleus and integrates signals received by the dendrites.

Synapse

The junction between two neurons where neurotransmitters are released, allowing signals to pass from one neuron to another.

Neurotransmitter

Chemicals in the brain that transmit signals from one neuron to another, influencing a wide range of bodily and psychological functions.

Norepinephrine

A neurotransmitter and hormone involved in arousal, alertness, and the stress response.