The Fact That Reserves Lost by Any Particular Bank Will

Multiple Choice

The fact that reserves lost by any particular bank will be gained by some other bank explains why the commercial banking system:

A) Has been able to reduce the vulnerability of banks to "runs" or "panics"
B) Can increase its demand deposits by a multiple of its excess reserves
C) Cannot increase its demand deposits by a multiple of its excess reserves
D) Has been based on the fractional reserve system of banking