When a Bank Makes a Loan by Crediting the Borrower's

question 102

Multiple Choice

When a bank makes a loan by crediting the borrower's checking account balance with an amount equal to the loan:

• A)money is created.
• B)the bank gains new reserves.
• C)the bank immediately loses reserves.
• D)the Fed has made an open-market purchase.

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Definitions:

Memory Skills

The cognitive abilities that allow one to store, retain, and recall information and experiences.

Repetitive Behavior

Actions or sequences of actions that are performed repeatedly in a similar manner, often observed in various contexts including disorders like autism.

Scheme Theory

A cognitive framework or approach that emphasizes the structuring of information into schemas, which are mental representations organizing knowledge and guiding information processing.

Fuzzy Trace Theory

A cognitive psychology theory suggesting people encode information into two types of representations: verbatim (exact details) and gist (the essence or meaning).