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:

Emotional Expression

The outward display or communication of emotions through facial expressions, body language, and voice.

Compulsive Actions

Repetitive behaviors performed according to certain rules or in a stereotyped fashion, often as a response to obsessive thoughts.

Catatonia

A psychiatric syndrome characterized by a lack of movement, activity, or expression, which can occur in severe mental health conditions.

Senseless, Immobility

An inability to move or respond, often resulting from shock or extreme confusion.