The Chartered Banking System Can Lend by a Multiple of Its

question 86

Multiple Choice

The chartered banking system can lend by a multiple of its excess reserves primarily because:

• A)its reserves are on deposit with the Bank of Canada
• B)its reserves are highly liquid assets.
• C)it loses reserves when it extends credit.
• D)its reserves are fractional.

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Definitions:

Foreign Competition

Competition that domestic companies face from companies located in other countries, affecting local markets and pricing.

Multinational Corporations

Large companies that operate in several countries, often with significant production or service facilities outside their country of origin.

Competitive Advantage

An attribute that allows an organization to outperform its competitors, such as cost structure, product quality, or market positioning.

Oil Imports

The purchasing of crude oil and petroleum products from foreign countries to meet domestic consumption and energy requirements.