If Banks Hold Any Amount of Their Deposits in Reserve

question 26

True/False

If banks hold any amount of their deposits in reserve, then they do not have the ability to influence the money supply.

---

Definitions:

Capacity

The throughput, or number of units a facility can hold, receive, store, or produce in a period of time.

Demand

The quantity of a product or service that consumers are willing and able to purchase at a certain price.

Lead

The initiation or start of a project or process, or the advantage or interval by which someone or something is ahead in a competition or race.

Lag

The time delay between a cause and its observable effect, often used in economics, technology, and signal processing contexts.