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.

---

Definitions:

Flagship Content

High-quality, main content created by a brand or organization intended to represent its core message and values prominently.

Phenomenon

An observable event or a remarkable occurrence that can be studied scientifically or described through personal insights.

Seminal

Having a strong influence on ideas, works, events, or developments that come later; pioneering.