Author Question: Requiring commercial banks to hold reserves equal to some fraction of their deposit liabilities ... (Read 109 times)

khang · **on:** Jun 29, 2018

Requiring commercial banks to hold reserves equal to some fraction of their deposit liabilities

A) acts as a constraint on bank lending.
B) is an alternative for banks that choose not to use the gold standard.
C) is without significance since banks are not required to meet their liabilities on demand by depositors.
D) prevents runs on banks by depositors who fear that the banks may not have assets equal to their liabilities.
E) really has no effect on the monetary system today.

Question 2

If a used-car dealer enjoys economic profits, then

A) as a group, its customers necessarily suffered a like amount in economic losses.
B) as a group, its customers were necessarily made worse off.
C) as a group, its competitors necessarily suffered economic losses.
D) all of the above are true.
E) none of the above is true.