单选题 Fractional reserve banking is the practice of keeping only a traction of deposits in the form of reserves. Depository institutions (commercial banks, savings and loan associations, mutual savings banks, and credit unions) are able to do this because only a small fraction of their depositors is expected to turn up during any given day or week to withdraw their deposits. The bulk of deposits is invested in financial assets, from which the depository institutions earn most of their income.
Those income-earning financial assets range from bills, notes, and bonds issued by private corporations and by the federal, state, and municipal governments to mortgage loans for housing. Each type of financial institution has a different type of portfolio of assets, which reflects their area of special expertise in managing financial assets.
To demonstrate how depository institutions create money under the present system of fractional reserve banking, hypothetical example of a commercial bank, Southwest National Bank, will be used. It is assumed that federal regulations require Southwest National Bank to hold a percentage of its deposits in the form of cash reserves. This is the reserve requirement. The reserves may be held in the form of currency and coin on the premises, a form of reserves called vault cash, or they may be held in a deposit at a regional Federal Reserve Bank.
Assume that the Southwest National Bank management, taking into account the reserve requirement and the projected amount of withdrawals arid deposits, decides to keep 20 percent of its deposits in rescues.

单选题 Why do the depository institutions have the fractional reserve banking?
A. Because they can keep a large amount of deposits from their depositors in the form of reserves.
B. Because most of their depositors would withdraw their deposits.
C. Because only a small fraction of their depositors would deposit money during a day or week.
D. Because they can meet the need of withdrawing of their depositors and make investments in other financial assets.

【正确答案】 D

【答案解析】文章第一段提到Depository institutions...week to withdraw their deposits。存款准备金是指金融机构为保证客户提取存款和资金清算需要而准备的在中央银行的存款。存款机构能这样做是因为存款者在不定的时间内会提取存款。只有D选项的意思是与题意相符。

单选题 What is the main source of income of the depository institutions?
A. Different types of portfolio. B. Bills, notes and bonds.
C. Deposits invested in financial assets. D. Large amount of assets.

【正确答案】 C

【答案解析】文章第二段提到Those income-earning financial assets...mortgage loans for housing。银行的收入来源很广，包括与个人与签订的bills, notes, and bonds等等，概括起来就是Deposits invested in financial assets。

单选题 How can we know the management of financial assets?
A. From the assets' area of special expertise.
B. From the portfolio of the assets.
C. From the scale of the assets.
D. From the reserve banks.

【正确答案】 B

【答案解析】文章第二段提到a different type of portfolio of assets…in managing financial assets。资产组合能反映一定地区的资产管理状况。

单选题 In what form are the reserves required to he held?
A. In the form of currency and coin on the premises.
B. In the form of vault cash.
C. In a deposit at a regional Federal Reserve Bank.
D. All of the above.

【正确答案】 D

【答案解析】文章第三段提到The reserves may be held...at a regional Federal Reserve Bank. 存储金所采取的形式有通货的形式，有备用金的形式和联邦银行存款的形式。

单选题 What is the reserve requirement?
A. The requirement for cash reserves.
B. The requirement for deposits in cash.
C. The percentage of a bank's deposits in the form of cash reserves.
D. The requirement of a bank to deposit a percentage of money.

【正确答案】 C

【答案解析】文章倒数第二段提到It is assumed that...This is the reserve requirement.采取的是现金的形式。