A System in Which Depository Institutions Hold Reserves That Are

question 125

Multiple Choice

A system in which depository institutions hold reserves that are less than the amount of total deposits is called

• A) fiat money banking.
• B) fractional reserve banking.
• C) central banking system.
• D) required reserve banking.

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Definitions:

Perpetual Inventory Records

The continuous tracking of inventory levels and updates in real-time, showing the quantity of inventory on hand at all times.

Credit for Returns

A financial adjustment made by a seller to the account of a buyer to reflect returned goods.

Discount Period

The discount period is the time frame during which a buyer can take advantage of a purchase discount offered by the supplier for early payment.

Total Amount Collected

The sum of money received from various sources, including sales, investments, financing, and other business activities.