Which of the Following Is True About Banks in a Fractional

question 110

Multiple Choice

Which of the following is true about banks in a fractional reserve banking system?

• A) Banks are able to create money when excess reserves are lent to individuals who need to borrow money.
• B) Banks can lend all of the deposits that are received.
• C) Banks must purchase gold that equals the value of the deposits received.
• D) Banks must deposit all cash from depositors with the Federal Reserve.
• E) Banks have to deposit all cash from depositors in their own bank vault.

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Definitions:

Amblyopia

A vision development disorder where an eye fails to achieve normal visual acuity, often referred to as "lazy eye."

Dullness

A lack of sharpness or liveliness; bluntness in sensation, sound, or pain, often associated with medical examinations.

Mydriatic

A substance used to dilate the pupils for ophthalmological examination or treatment.

Miotic

Related to or causing the constriction of the pupil of the eye.