Demand Deposits Pose a Liquidity Risk for FIs Because Funds

question 45

True/False

Demand deposits pose a liquidity risk for FIs because funds may be withdrawn at any time.

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Definitions:

Elastic Demand

Demand for which a given percentage change in price results in an even larger percentage change in quantity demanded.

Odd Pricing

A pricing tactic in which a firm prices products a few cents below the next dollar amount.

Price Sensitivity

How much the desire for a product or service shifts in response to price variations.

Strategic Decisions

High-level choices that determine the direction and success of an organization.