Which of the Following Happens in a 100-Percent-Reserve Banking System

question 187

Multiple Choice

Which of the following happens in a 100-percent-reserve banking system?

• A)Banks can create money by issuing currency.
• B)Banks can create money by lending out reserves.
• C)Banks can lend money to their customers.
• D)Banks hold as many reserves as they hold deposits.

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Definitions:

Preconventional

A stage in moral development where an individual’s sense of morality is externally controlled, primarily focused on avoiding punishment or seeking rewards.

Conventional

Pertaining to what is generally accepted or practiced; following traditional or widely accepted standards.

Moral Thinking

The process of reasoning about the principles of right and wrong behavior and the goodness or badness of human character.

Concrete Operational

A stage in cognitive development, according to Piaget, where children aged approximately 7 to 12 years can think logically about concrete events.