Which of the Following Is True of a Fractional Reserve

question 93

Multiple Choice

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

• A)Banks must hold all of depositors' deposits in their vaults
• B)Banking is only a fraction of the services banks provide to their customers
• C)Banks lend out part of their depositors' deposits
• D)The reserve ratio is 100%
• E)Banks may not hold excess reserves

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Definitions:

Neutral Stimulus

An initially inactive stimulus that, through association, acquires the capacity to evoke a conditioned response.

Higher Order Conditioning

A process in behavioral psychology where a conditioned stimulus is paired with a new neutral stimulus, creating a second-level conditioned response.

Conditioned Stimulus

A previously neutral stimulus that, after being paired with an unconditioned stimulus, elicits a conditioned response.

Operant Conditioning

A process of behavioral adjustment where the level of an action is modified through the application of rewards or punishments.