When New Checkable Deposits Are Created Through Loans

question 27

Multiple Choice

When new checkable deposits are created through loans,

• A) the money supply contracts.
• B) excess reserves are destroyed.
• C) the money supply remains the same.
• D) the money supply expands.
• E) the required reserve ratio declines

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Definitions:

Chlorpromazine

An antipsychotic medication used to treat schizophrenia and other psychotic disorders, often noted for its tranquilizing effects.

Asylum

A place for treatment of the mentally ill. Units for the mentally ill were established within the great Arab hospitals in Baghdad in AD 800 and asylums were created in other Arab cities some 500 years before Europeans built their first asylums. Treatment in Arab asylums followed the tradition of care, support, and compassion.

Mentally Ill

Refers to individuals suffering from a wide range of mental health conditions that affect mood, thinking, and behavior.

Rockwood Asylum

A historical psychiatric hospital in Ontario, Canada, known for its progressive treatment of mental health patients in the 19th and 20th centuries.