How Much Does a Bank Earn If It Leaves Assets

question 128

Multiple Choice

How much does a bank earn if it leaves assets in the form of reserves?

• A) personal loan lending rate
• B) the fed funds rate
• C) a small positive rate
• D) the discount rate

---

Definitions:

Stereotypes

Oversimplified and widely held beliefs about the characteristics of a group of people, often leading to prejudgments and discrimination.

Human Thinking

The process by which humans form thoughts, make decisions, solve problems, and engage in various forms of cognition.

Cognitive Dissonance

The mental discomfort experienced by a person who holds two or more contradictory beliefs, ideas, or values at the same time.

Psychological Tension

A state of mental or emotional strain, often resulting from challenging or demanding circumstances.