If the Fed's Actions Cause a Bank's Reserves to Increase

question 58

Multiple Choice

If the Fed's actions cause a bank's reserves to increase, we know the bank will have an incentive to convert the new reserves into loans and bonds because

• A)of government regulation.
• B)reserves are taxed by the federal government.
• C)of moral suasion.
• D)reserves don't earn interest.
• E)the Fed will take the reserves back if they are not used.

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Definitions:

Punitive Damages

Financial compensation awarded to an injured party, beyond actual damages, intended to punish the wrongdoer.

Compensate

To provide something, usually money, to someone in recognition of loss, suffering, or injury incurred; to make up for something unwelcome or unpleasant.

Victims

Individuals or entities who suffer harm or loss due to another's actions or events beyond their control.

Invasion of Privacy

Unauthorized intrusion into the personal life of another, without just cause, which can give the person whose privacy has been invaded a right to bring a lawsuit.