If There Are No Excess Reserves in the Banking System

question 92

Multiple Choice

If there are no excess reserves in the banking system and the Fed lowers the required reserve ratio,it follows that banks will now have __________,which they can use to extend loans and create new __________.

• A) positive excess reserves; checkable deposits
• B) negative excess reserves; currency
• C) positive excess reserves; currency
• D) more vault cash; checkable deposits
• E) none of the above

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Definitions:

Pelvic Inflammatory Disease

An infection of the female reproductive organs, often caused by sexually transmitted bacteria, leading to symptoms such as pelvic pain.

Frequency

The number of occurrences of a repeating event per unit of time, often used in physics, electronics, and statistics.

Acne

A skin condition characterized by the presence of pimples, blackheads, and cysts, mainly due to oil gland overactivity and pore blockage.