When a Bank Accepts a Checkable Deposit from a Customer

question 20

Multiple Choice

When a bank accepts a checkable deposit from a customer, its deposits will increase and its excess reserves will

• A)increase by the same amount as deposits.
• B)increase by less than the deposits.
• C)increase by more than the deposits.
• D)decrease.Blooms: Understand

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Definitions:

Predatory Pricing

A strategy where a company sets very low prices to eliminate competition and establish a monopoly in the market.

Tacit Collusion

An unspoken, implicit understanding among competitors to avoid certain competitive behaviors, such as price cutting.

Quantity-fixing Agreements

involve deals or arrangements between competing businesses to restrict output levels, aiming to influence market prices or conditions.

Price-leadership Model

A market strategy where one dominating firm sets the price for its product, and other firms in the industry follow suit, often observed in oligopolistic markets.