9. Banks hold reserves:?

Question

9. Banks hold reserves:

A. to earn interest.

B. to increase profits.

C. to escape the double coincidence of wants.

D. to meet depositor withdrawals and payments.

E. only because the government requires them to hold reserves.

10. Commercial banks create new money:

A. by printing currency.

B. by issuing checks.

C. through multiple rounds of lending and borrowing.

D. when they buy government bonds from the Federal Reserve.

E. when they increase their desired reserve/deposit ratio.

Answer 1

D. usually 10%

C.

Answer 2

9. Banks hold reserves:

correct answer is:.

D. to meet depositor withdrawals and payments.

10. Commercial banks create new money:

correct answer is:

Answer 3

D. to meet depositor withdrawals and payments.

C. through multiple rounds of lending and borrowing.