With Fractional Reserve Banking

question 253

Multiple Choice

With fractional reserve banking

• A) banks can not generate profits.
• B) monetary policy will be ineffective.
• C) banks retain only a portion of their deposits in their vaults or at Federal Reserve banks.
• D) banks can act as securities brokers.

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Definitions:

Plaintiff

The party who initiates a lawsuit or legal action against another party in a court of law.

Material Breach

A significant violation or failure to perform under a contract that harms the aggrieved party and gives them the right to claim damages or terminate the agreement.

Immaterial Breach

A minor violation of a contract that does not significantly harm the interests of the other party or affect the overall performance of the contract.

Mitigate

Mitigate means to make less severe, serious, or painful; in legal and business contexts, it often refers to actions taken to reduce risks or minimize the impact of damages.