The Chartered Banking System Can Lend by a Multiple of Its

question 86

Multiple Choice

The chartered banking system can lend by a multiple of its excess reserves primarily because:

• A)its reserves are on deposit with the Bank of Canada
• B)its reserves are highly liquid assets.
• C)it loses reserves when it extends credit.
• D)its reserves are fractional.

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Definitions:

Colin Powell

An American military general and statesman who served as the 65th United States Secretary of State.

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A preconceived opinion or judgment about someone or something without adequate knowledge or experience.

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Unfair or prejudicial treatment of people based on characteristics such as race, age, sex, or disability.