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Author Question: Banks hold 100 percent of their customers' deposits as reserves. Is the previous statement correct ... (Read 118 times)

ss2343

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on: Jun 29, 2018
Banks hold 100 percent of their customers' deposits as reserves. Is the previous statement correct or not?
 
  What will be an ideal response?

Question 2

If a market is shared equally by 100 firms, the Herfindahl-Hirschman Index is
 
  A) 1/100.
  B) 1/50.
  C) 50.
  D) 100.


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elyse44

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The statement is incorrect. If banks kept all of their deposits as reserves, banks would earn no profit. So banks keep a fraction of their deposits as reserves.

Answer to Question 2

D


ss2343

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Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

ktidd

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Reply 3 on: Yesterday
Excellent

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