When a Bank Obtains a Loan from the Fed,it Follows

question 72

Multiple Choice

When a bank obtains a loan from the Fed,it follows that the

• A) simple deposit multiplier rises.
• B) bank (itself)can create more loans.
• C) bank's reserves decrease.
• D) bank's reserves remain unchanged.
• E) none of the above

Comprehend the difference and application of multiple remedies available in the event of a breach of contract, including specific performance, liquidated damages, and reformation.

Recognize the significance of express conditions in contracts and the common language used to indicate them.

Understand the concept and requirements for the performance of contracts, specifically the difference between complete and substantial performance.

Analyze the legal impacts of anticipatory repudiation on the rights and obligations of the non-breaching party.

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Definitions:

Money Multiplier

The ratio of the change in the total money supply to the change in the monetary base, indicating how an initial deposit can lead to a greater final increase in the total money supply.

Reserve Banking

A banking system in which banks hold a fraction of their deposits as reserves, enabling them to meet withdrawal demands and extend credits.

Create Money

The process by which the central bank of a country (or other monetary authority) increases the money supply, often leading to the production of physical money or the creation of digital currency units.

Reserve Ratio

The fraction of depositors' balances that banks must have on hand as cash, a regulation enforced by central banking authorities.