The Banking System Can Increase Chequing Deposits by More Than

question 45

Multiple Choice

The banking system can increase chequing deposits by more than a single bank,because

• A) the banking system must keep reserves equal to 100% of its chequing deposits.
• B) the central bank follows policies that prevent reserves from falling below the level required by law.
• C) excess reserves loaned out by any particular bank will be deposited in some other bank.
• D) borrowers often retain a portion of a loan in cash.
• E) excess reserves loaned out by any particular bank will be taken out of circulation.

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Definitions:

Cervical Vertebrae

The seven vertebrae located in the neck region of the spine, known individually as C1 through C7.

Transverse Foramina

Holes found in the transverse processes of cervical vertebrae through which the vertebral artery and vein and sympathetic nerves pass.

Cervical Vertebrae

The uppermost seven vertebrae in the vertebral column, located in the neck, designated C1 through C7.

Xiphoid Process

the small, cartilaginous process extending from the lower part of the sternum, which becomes ossified in adults.