Whenever Actual Reserves Exceed Desired Reserves, the Bank

question 20

Multiple Choice

Whenever actual reserves exceed desired reserves, the bank

• A)will raise the interest rate on its loans.
• B)will borrow funds from another bank.
• C)needs to call in loans.
• D)will go out of business.
• E)can make new loans.

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Definitions:

Postconventional

A stage in Kohlberg's theory of moral development where moral reasoning is based on universal ethical principles and abstract reasoning.

Moral Development

The process by which individuals learn to distinguish right from wrong, developing beliefs, values, and behaviors that guide responsible decision-making.

Cognitive Awareness

The recognition and understanding of one's own mental processes, including thoughts, feelings, and perceptions.

Personal Experience

An individual's own lived experiences, perceptions, and feelings, which shape their understanding and actions.