If Banks Were Required to Keep 100% of Deposits in Reserves

question 6

Multiple Choice

If banks were required to keep 100% of deposits in reserves, they could:

• A) make more loans.
• B) make no loans.
• C) make more deposits.
• D) use excess reserves for loans.

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Definitions:

Bystander Effect

A social factor that affects prosocial behavior: As the number of bystanders at an emergency increases, the probability that the victim will receive help decreases, and the help, if given, is likely to be delayed.

Catastrophes

Large-scale disasters or events causing great damage or suffering.

Aggression

Behavior aimed at causing harm or pain to others, which can be physical or verbal and motivated by various factors.

Intentionally Inflicting

The deliberate act of causing harm or damage to someone or something.