Asked by Aaron Ehsanipour on Jun 18, 2024
Verified
In a system of 100-percent-reserve banking,
A) banks do not accept deposits.
B) banks do not influence the supply of money.
C) loans are the only asset item for banks.
D) banks can increase the money supply.
Reserve Banking
A banking system in which banks are required to hold a certain percentage of their deposits as reserves, either in their own vaults or deposited at a central bank.
Money Supply
The total sum of all financial assets in an economy at any given moment, which includes cash, coins, and the balances in checking and savings accounts.
Deposits
Funds placed into an account at a banking institution for safekeeping.
- Understand the concept of 100-percent-reserve banking and its impact on the money supply.
Verified Answer
Learning Objectives
- Understand the concept of 100-percent-reserve banking and its impact on the money supply.
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