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Partly as a Result of Sweep Accounts, U

Question 48

Multiple Choice

Partly as a result of sweep accounts, U.S. bank legal reserve balances have fallen by more than half. One of the consequences caused by this decline has been:


A) That banks must open many more savings accounts to raise reserves
B) That banks must curtail somewhat their commercial lending practices
C) An increase in the volatility of the Fed funds market due to the lessened supply of tradable reserves
D) All of the above
E) None of the above

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