If the Reserve Requirement Is Increased to 25 Per Cent

question 12

Multiple Choice

If the reserve requirement is increased to 25 per cent, then the First Bank of Oz:

• A) can create money by making a new loan
• B) can hold excess reserves
• C) cannot make a new loan
• D) both B and C

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Definitions:

Case of First Impression

A legal case in which a matter has never been decided before by the courts, thus presenting a new legal issue for determination.

Legal Issue

A matter or dispute subject to laws and legal systems, often involving interpretation of statutes, regulations, and case law.

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The authority of a court to hear and decide a specific case.

Social Changes

The significant alterations over time in behavior patterns, cultural norms, and societal structures.