When a Bank Receives Deposits

question 228

Multiple Choice

When a bank receives deposits,

• A)it must hold the entire amount as reserves in case of withdrawal.
• B)the Fed requires it to hold only a small percentage as reserves.
• C)it and it alone decides how much it will hold as reserves.
• D)its liabilities increase in amount but its assets do not change.
• E)its assets increase in amount but its liabilities do not change.

---

Definitions:

Permanent Change

An alteration or modification in processes, behavior, or systems that is intended to last indefinitely, without reversal to original state.

Conversion Theory

A theory suggesting that minority views can influence and ultimately change the majority opinion under certain conditions.

Moscovici

Serge Moscovici is a social psychologist known for his work on social influence and the theory of social representations.

Indirect Impact

Effects or outcomes that are not directly caused by an action or event, but occur as a secondary result.