Identify the Correct Statement Regarding a Fractional Reserve Banking System

question 30

Multiple Choice

Identify the correct statement regarding a fractional reserve banking system.

• A)Only a fraction of the banks in the system are allowed to create money.
• B)Only a fraction of the banks in the system have reserves.
• C)The claims outstanding against the bank are only a fraction of the bank's total reserves.
• D)Each bank must deposit a fraction of its reserves with the Federal Reserve Bank.
• E)Bank reserves represent only a fraction of bank deposits.

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Definitions:

Cork Cambium

A type of meristem found in the bark of plants that produces cork cells to provide protection and reduce water loss.

Periderm

A protective outer layer of tissue in plants, replacing the epidermis in parts of the stems and roots, consisting of the cork, cork cambium, and phelloderm.

Xylem

The vascular tissue in plants responsible for the conduction of water and nutrients from the roots to the leaves and other parts.

Vascular Cambium

The vascular cambium is a layer of stem cells located between the xylem and the phloem in dicots and gymnosperms, responsible for producing new layers of vascular tissue and contributing to stem growth.