Banks May Borrow from or Lend to Another Bank in the Federal

question 7

Multiple Choice

Banks may borrow from or lend to another bank in the Federal Funds market. A loan of excess reserves from one bank to another bank is recorded as a(n) ________ for the borrowing bank and a(n) ________ for the lending bank.

• A)asset;asset
• B)asset;liability
• C)liability;liability
• D)liability;asset

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Definitions:

DC

Direct Current, characterized by the unidirectional flow of electric charge, typically used in batteries, solar cells, and as the output of rectifiers.

Armature

The rotating coil or coils of a dynamo or electric motor, which induce electromotive force by rotating in a magnetic field.

Magnetic Field Rotation

This term refers to the phenomenon seen in rotating machinery and devices like electric motors, where the magnetic field within these devices rotates, causing the rotor to spin.

Phase Rotation

The direction of rotation of a magnetic field produced by the voltages of a poly-phase power system.