Banks Can Make Loans Up to an Amount Equal to Their

question 26

Multiple Choice

Banks can make loans up to an amount equal to their

• A)total deposits.
• B)total reserves.
• C)required reserves.
• D)excess reserves.
• E)total government securities.

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Definitions:

Poverty

A condition where individuals or communities lack the financial resources to meet basic life needs such as food, shelter, and clothing.

Welfare Dependency

A condition in which individuals or households rely heavily on government assistance for long periods instead of achieving financial independence through employment.

Able-Bodied Person

An individual who is physically capable of working or performing daily tasks without assistance.

Negative Income Tax

Cash payments by the government to the poor—an income tax in reverse. The cash payments decrease as income levels increase.