If a Bank Has Excess Reserves Greater Than the Amount

question 92

Multiple Choice

If a bank has excess reserves greater than the amount of a deposit outflow,the outflow will result in equal reductions in

• A)deposits and reserves.
• B)deposits and loans.
• C)capital and reserves.
• D)capital and loans.

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Definitions:

Variable Costs

Expenditures that directly correspond with production levels or the amount of sales.

Fixed Costs

Expenses that remain constant regardless of the level of production or business activity.

Suspension of Operations

The temporary halt of business activities or operations, which can be due to a variety of reasons, including economic downturns or emergencies.

Variable Cost

Costs that change in proportion to the level of goods or services produced, such as materials and labor.