When can a bank make loans? a. when it has the minimum amount of required reserves b.
Question:
When can a bank make loans?
a. | when it has the minimum amount of required reserves |
b. | only when it is confident that it can meet all the cash needs of depositors |
c. | only when it has deposited all cash at the Federal Reserve |
d. | when it has reserves greater than the amount of required reserves |
e. | There is not enough information to solve this problem. |
37. In a fractional reserve banking system, banks
a. | are able to create money when excess reserves are lent to individuals who need to borrow money. |
b. | can lend all of the deposits that are received. |
c. | must purchase gold that equals the value of the deposits received. |
d. | must deposit all cash from depositors with the Federal Reserve. |
e. | have to deposit all cash from depositors in their own bank vault. |
308. The federal funds rate is the
a. | interest on deposits that private banks hold on reserve at the Federal Reserve. |
b. | interest rate on loans between private banks. |
c. | interest for loans from the Federal Reserve to private banks. |
d. | income generated by the Federal Reserve through discount loans. |
e. | mandatory portion of bank deposits that are set aside and not loaned out. |
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill