Banks tend to hold some excess reserves
A) for precautionary purposes to reduce the probability of illiquidity
B) to avoid the costs of borrowing from other banks at the federal funds rate
C) to avoid the costs of borrowing from the Fed at the discount rate
D) all of the above
E) none of the above
Correct Answer:
Verified
Q12: If the currency-deposit ratio is 23% and
Q13: While the Fed can influence the money
Q14: Other things remaining the same, the smaller
Q15: The reserve-deposit ratio is likely to increase
Q16: The stock of high-powered money is increased
Q18: High-powered money
A)earns more interest than other forms
Q19: Assume many more stores agree to accept
Q20: An increase in the market interest rate
Q21: If the Fed imposed a 100% reserve
Q22: If the Fed decreases the reserve requirement,
A)market
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