An individual bank can safely lend out a multiple of its excess reserves, but the banking system can safely lend out only an amount equal to the excess reserves in the banking system.

(A) True

(B) False

Question

Business

Brianna Chambers

25 May, 21:43

An individual bank can safely lend out a multiple of its excess reserves, but the banking system can safely lend out only an amount equal to the excess reserves in the banking system.

(A) True

(B) False

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Answers (1)

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Tania Berg · Answer 1

Answer: "An individual bank can safely lend out a multiple of its excess reserves, but the banking system can safely lend out only an amount equal to the excess reserves in the banking system."

Is (B) FALSE.

Explanation: The correct statement is "An individual bank can safely lend out only an amount equal to its excess reserves but the banking system can safely lend out a multiple of its excess reserves."

An individual bank can safely lend out a multiple of its excess reserves, but the banking system can safely lend out only an amount equal to the excess reserves in the banking system.(A) True(B) False

An individual bank can safely lend out a multiple of its excess reserves, but the banking system can safely lend out only an amount equal to the excess reserves in the banking system.

(A) True

(B) False