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If Banks Choose Not to Lend Out Their Excess Reserves

question 114

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If banks choose not to lend out their excess reserves then the money supply will not eapand.


Definitions:

Conformity

The act of matching attitudes, beliefs, and behaviors to group norms or standards.

Conforming Goods

Goods that conform to contract specifications.

Contract Specifications

Detailed terms and conditions outlined in a contract that specify the requirements of the agreement.

Good Faith

A fundamental principle in contracts requiring parties to deal with each other honestly and without ulterior motives.

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