The Bank Practice of Lending Money and Therefore Holding Less

question 49

Multiple Choice

The bank practice of lending money and therefore holding less cash than what is owed its depositors is called ________ banking.

• A) fractional-reserve
• B) Federal Reserve
• C) cash flow
• D) creative
• E) deposit ratio

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Definitions:

Resort Town

A town specifically designed and operated primarily for tourists, where lodging, food, entertainment, and shopping facilities are provided.

Government Vouchers

Government vouchers are certificates issued by the government that can be used as payment for certain goods or services, often part of social or educational programs.

In-Kind Transfer

A form of payment made in goods and services rather than in cash to beneficiaries, often used in social programs.

Negative Income Tax

A proposed form of social assistance that provides income support by giving individuals a guaranteed minimum income, with payments decreasing as the recipient's income rises.