If a Bank Expects Inflation to Increase in the near Future,how

question 108

Multiple Choice

If a bank expects inflation to increase in the near future,how will it respond?

• A) It will start paying less interest on deposits.
• B) It will seek to reduce the amount of cash held in its vaults.
• C) It will temporarily scale back its efforts to gain new customers.
• D) It will start charging more interest on loans.
• E) It will temporarily suspend withdrawals.

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Definitions:

Extending Credit

The practice of allowing a buyer to purchase goods or services now and pay for them at a later date, often involving the assessment of the buyer's creditworthiness.

Facilitating Function

Activities that assist in the movement of goods from the producer to the consumer, including transportation, storage, and financial services.

Channel Intermediaries

Organizations or individuals that act as middlemen in the distribution process, helping to move products from the manufacturer to the consumer.

Direct Channel

A method of distribution where a company sells its products or services directly to consumers without the use of intermediaries.