Banks Can Make Additional Loans When Required Reserves Are

question 104

Multiple Choice

Banks can make additional loans when required reserves are

• A)greater than total reserves.
• B)less than total reserves.
• C)less than total deposits.
• D)less than total loans.

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Definitions:

Loanable Funds

The sum of money available for borrowing, influenced by savings and investments, within an economy at any given time.

National Saving

The total amount of saving in a country, equal to the sum of private and public saving, representing the national income not spent on consumption or government expenditure.

Public Saving

The portion of a government's budget surplus, which is the difference between tax revenues and government spending.

Private Saving

Private saving is the portion of households' and businesses' income that is not spent on consumption or taxes, typically saved for future investment or consumption.