If the Federal Reserve Determined That Banks Needed to Increase

question 6

Multiple Choice

If the Federal Reserve determined that banks needed to increase the amount of owner's equity,how could this be achieved?

• A) Banks would decrease reserves,but borrowings would not change.
• B) Banks would increase reserves,but borrowings would increase.
• C) Banks would increase reserves,but borrowings would decrease.
• D) Banks would decrease reserves,but borrowings would increase.
• E) Banks' reserves would not change,but borrowings would increase.

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Definitions:

Horizontal Mergers

The combination of two or more firms operating at the same level of the supply chain in the same or different industries, potentially increasing market share and efficiency but also raising antitrust concerns.

Vertical Mergers

Mergers between companies in different stages of production or distribution within the same industry.

Conglomerate Mergers

A type of merger where firms from unrelated business sectors combine to form a larger entity.

Antitrust Policy

Regulations and laws intended to prevent monopolies and promote competition among businesses.