Beth and Celia Are Involved in an Action

question 53

Multiple Choice

Beth and Celia are involved in an action. The best definition of an action is

• A) a criminal prosecution, not a civil proceeding.
• B) a failure to perform a legal obligation.
• C) a judicial proceeding for the resolution of a dispute.
• D) a way to raise capital so that a business can grow.

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Definitions:

Money Supply

The collective volume of monetary assets within an economy at a certain point, including cash, coins, and balances in checking and savings accounts.

Fractional-reserve Banking

A banking system where banks hold only a fraction of deposits as reserves and lend out the remainder, thereby creating additional money supply.

Bank Runs

Situations where a large number of bank customers withdraw their deposits simultaneously due to fears that the bank will become insolvent.

Reserve Requirement Ratio

The reserve requirement ratio is the fraction of deposits that banks are required to keep on hand as reserves, determined by the central bank.