When a Bank Lends Excess Reserves to a Customer

question 263

Multiple Choice

When a bank lends excess reserves to a customer:

• A) this does not affect the money supply.
• B) the money supply is increased.
• C) the money supply is decreased.
• D) it has the same effect as when one customer writes a cheque to another customer at a different bank.

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Definitions:

Employment At Will

A legal doctrine in some jurisdictions that allows an employer to terminate employees at any time for any reason, except an illegal one, or for no reason without incurring legal liability.

Due-Process Policy

Regulations that guarantee company procedures will be conducted fairly, especially concerning disciplinary actions against employees.

Internal Recruitment Sources

These are the channels within an organization used to fill job vacancies from the existing workforce.

Political Considerations

Factors involving governmental policies, regulations, and decisions that impact organizational operations and strategies.