Explain How Current Financial Institutions Can Create $342 Out of a Deposit

question 26

Essay

Explain how current financial institutions can create $342 out of a deposit of $200.

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Definitions:

Unconditioned Response

An automatic, natural reaction to a stimulus that occurs without prior conditioning or learning.

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally and automatically triggers a response without prior learning.

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with an unconditioned stimulus, eventually comes to trigger a conditioned response.

Cupboard Door

A movable panel used to cover the opening of a cupboard, providing access to the contents inside and often serving to protect those contents.