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.

---

Definitions:

Unpleasant Word

A term that evokes negative feelings or associations.

Pleasant Words

Words that evoke positive feelings and associations, often used to create a friendly or agreeable impact.

Signal-Detection Theory

A theory that explores how decisions are made under conditions of uncertainty, distinguishing between sensory signals and noise.

False Alarms

Incorrect or mistaken alerts, typically referring to a warning signal that goes off inappropriately, suggesting an event or danger that is non-existent.