The federal government pays for the services it provides primarily through:

Select one:

a. service fees

b. creating money

c. borrowing

d. selling assets owned by the government

e. none of the above

Question 17

The monetary base:

Select one:

a. equals the money supply

b. consists of checkable and noncheckable deposits

c. consists of bank reserves, plus currency

d. equals the money multiplier, plus bank reserves

Question 18

The U.S. banking system has the ability to alter the size of the money supply because of the use of:

Select one:

a. a 100% reserve system

b. a fractional reserve system

c. the Federal Reserve System