Under the Modern System of Fractional Reserve Banking, Banks

question 60

Multiple Choice

Under the modern system of fractional reserve banking, banks

• A)keep cash reserves equal to only a fraction of their deposit liabilities.
• B)loan out their excess reserves at interest, which is the key to their profitability.
• C)are always potentially vulnerable to runs.
• D)All of the above are correct.

Grasp the importance and structure of a personal or organizational mission statement.

Understand the psychological factors, such as fear of success, that impact work habits.

Acknowledge the significance of maintaining an organized workspace and its impact on performance.

Recognize the value of working smarter, not harder, through effective prioritization and leveraging technology.

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Definitions:

Working Memory

A cognitive system with a limited capacity that is responsible for temporarily holding information available for processing, crucial for reasoning and the guidance of decision-making and behavior.

Atkinson And Shiffrin

Two cognitive psychologists who, in 1968, proposed the multi-store model of memory that outlines three distinct stages: sensory memory, short-term memory, and long-term memory.

Rehearse Information

The act of practicing or mentally reviewing information repeatedly to enhance memory retention.

Sensory Memory

The shortest-term element of memory, which acts as a buffer for stimuli received through the five senses.