Reserves That the Fed Injects into the Banking System Are

question 57

Multiple Choice

Reserves that the Fed injects into the banking system are ultimately

• A) converted into loans that banks make to other banks
• B) distributed among different banks in the system as required reserves
• C) end up in just two or three banks
• D) ineffective at increasing money supply
• E) important to banks that want more customers

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Definitions:

Produced

Created or manufactured, often referring to goods or substances made available through a process of physical or chemical transformation.

Tectonic Plates

Massive, irregularly shaped slabs of solid rock comprising the Earth's lithosphere, whose movements cause earthquakes, volcanic eruptions, and the creation of mountain ranges.

Kilocalories

A unit of energy measurement used commonly in nutrition to quantify the energy content in food, equivalent to 1,000 calories.

Ecosystem

A biological community of interacting organisms and their physical environment, functioning as a unit.