Whenever Actual Reserves Exceed Desired Reserves, the Bank

question 292

Multiple Choice

Whenever actual reserves exceed desired reserves, the bank

• A) will go out of business.
• B) needs to call in loans.
• C) can lend out additional funds.
• D) must increase the amount of its required reserves by obtaining more cash.

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Definitions:

Inputs Employed

The resources used in the production of goods and services, such as labor, capital, and raw materials.

Derived Demand

Demand that exists not for the good or service itself, but for the goods or services produced by it. This demand is dependent on the demand for another product or service.

Hair Stylist

A professional who specializes in cutting, coloring, and styling hair to improve or maintain a person's appearance.

Salon Owner

An individual who owns and manages a salon, responsible for its operational, financial, and administrative aspects.