Which of the Following Allows Banks to Minimise the Cost

question 63

Multiple Choice

Which of the following allows banks to minimise the cost to a business of borrowing?
I. Borrowing long and lending short
II. Raising funds from a large number of depositors
III. Creating money by lending all their reserves

• A)I only
• B)II only
• C)I and III
• D)II and III

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Definitions:

Utility Function

Represents a consumer's preferences by assigning a utility value to each possible choice, indicating the level of satisfaction or happiness derived from those choices.

Edgeworth Box

A diagram used in microeconomics to show the efficient distribution of resources between two individuals or the allocation of two goods in an economy.

Pareto Optimal

In resource distribution, a framework where the betterment of one party directly causes a disadvantage to another party.

Initial Allocation

The initial distribution of resources, goods, or assets among various parties or agents in an economic model or real-world scenario.