The Banking System Can Increase Chequing Deposits by More Than

Multiple Choice

The banking system can increase chequing deposits by more than a single bank,because

A) the banking system must keep reserves equal to 100% of its chequing deposits.
B) the central bank follows policies that prevent reserves from falling below the level required by law.
C) excess reserves loaned out by any particular bank will be deposited in some other bank.
D) borrowers often retain a portion of a loan in cash.
E) excess reserves loaned out by any particular bank will be taken out of circulation.