Recall the Application About the Fed Increasing Bank Reserves During

question 160

Multiple Choice

Recall the Application about the Fed increasing bank reserves during the financial crisis in 2008 to answer the following question(s) . During the height of the financial crisis in September 2008, The Fed injected large amounts of reserves into banks, and in the next month, they started paying interest to banks on these reserves. Prior to this time, banks earned no interest on either required or excess reserves.
-According to the Application, the Fed started paying interest to banks on reserves. Since this change has occurred,

• A) total reserves now far exceed required reserves.
• B) total reserves are finally equal to required reserves.
• C) all total reserves are now excess reserves.
• D) required reserves now exceed total reserves.

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Definitions:

Airfreight

Transport of goods by aircraft, a fast but generally more expensive method of shipping goods over long distances.

JIT

Just-In-Time is a management strategy that aligns raw-material orders from suppliers directly with production schedules to minimize inventory costs.

Supply-Chain Strategy

A plan for managing all aspects of a product's supply chain, from raw materials to distribution, to maximize efficiency, reduce costs, and enhance competitiveness.