Banks and Customers Are Most Likely to Be Reluctant to Use

question 17

Multiple Choice

Banks and customers are most likely to be reluctant to use the full lending capacity made available by the Federal Reserve when the economy experiences

• A)Growth and low interest rates.
• B)Growth and inflation rates higher than the interest rate.
• C)High inflation rates.
• D)A deep recession.

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Definitions:

Withdraw

The act of removing funds from a bank account, or the process of pulling out of an agreement or investment.

Inherited

Property or assets received from an ancestor or predecessor typically through a will or succession.

Annuity Due

A series of equal payments made at the beginning of consecutive periods over a fixed length of time.

Interest Rate

The cost incurred by a borrower from a lender for the use of assets, represented as a proportion of the principal.