The Banking System Creates Additional Money by Making Loans Equal

question 81

True/False

The banking system creates additional money by making loans equal to total reserves.
The banking system cannot lend up to total reserves because the Fed requires banks to hold some minimum reserves.

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Definitions:

Organizational Architecture

The structure of an organization. Consists of the assignment of decision rights within the organization, the methods of rewarding individuals, and the systems to evaluate the performance of both individuals and business units.

Product Redesign

The process of changing or updating a product’s features, performance, or aesthetics to meet new market demands or improve efficiency.

Just-In-Time

A production strategy aimed at reducing times within the production system as well as response times from suppliers and to customers.

Demand Pull

An economic condition where an increase in demand for goods and services leads to higher prices and production.