An Individual Bank Can Safely Lend Out a Multiple of Its

question 195

True/False

An individual bank can safely lend out a multiple of its excess reserves, but the banking system can safely lend
out only an amount equal to the excess reserves in the banking system.

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Definitions:

Assurance of Supply

The confidence in a supplier's ability to provide consistent and continuous goods or services, meeting the buyer’s requirements.

Greater Flexibility

The enhanced ability of an organization or system to adapt to changes, adjust to new conditions, or alter operations in response to different requirements.

Delivery Scheduling

The process of planning and controlling the movement of goods to ensure they reach the customer in a timely manner.

Multiple Sourcing

A procurement strategy that involves buying a particular product from several suppliers to reduce dependency on any single supplier and to increase competition and flexibility.