If People Refused to Use Banks to Create Checkable Deposits

question 12

Multiple Choice

If people refused to use banks to create checkable deposits, the banking system would:

• A) not be affected in the money creating process.
• B) not have a way to loan out excess reserves.
• C) be able to expand the money supply by more than the money multiplier indicates.
• D) not be able to create new money.

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Definitions:

First Continental Congress

A gathering of delegates from twelve of the Thirteen Colonies in 1774, which met to address grievances against British policies and to organize colonial resistance.

King George III

The monarch of Great Britain and Ireland during the late 18th century, notably during the American Revolutionary War.

Petition

A petition is a formal written request, often signed by many people, appealing to authority in respect of a particular cause.

Articles of Confederation

The Articles of Confederation was the first constitution of the United States, in effect from 1781 to 1789, that provided a loose federation of sovereign states and a weak central government.