If Banks Cannot Lend All of Their Excess Reserves

question 233

Multiple Choice

If banks cannot lend all of their excess reserves:

• A) the money multiplier increases.
• B) the money multiplier decreases.
• C) the money multiplier stays the same.
• D) the amount of loans by the bank increases.
• E) checkable deposits decrease.

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Definitions:

Preconventional

A stage in moral development where an individual’s sense of morality is externally controlled, primarily focused on avoiding punishment or seeking rewards.

Conventional

Pertaining to what is generally accepted or practiced; following traditional or widely accepted standards.

Moral Thinking

The process of reasoning about the principles of right and wrong behavior and the goodness or badness of human character.

Concrete Operational

A stage in cognitive development, according to Piaget, where children aged approximately 7 to 12 years can think logically about concrete events.