One Factor That Increases the Volume of Bank Reserves Is

question 132

Multiple Choice

One factor that increases the volume of bank reserves is a decrease in

• A) reserve requirements.
• B) time and savings deposits.
• C) life insurance company reserves.
• D) the level of cash holdings.

---

Definitions:

Bond Indenture

A legal contract outlining the terms and conditions between bond issuers and bondholders, including information such as interest rates and maturity dates.

Debenture Bonds

Financial securities issued by a company that are backed only by the issuer's creditworthiness and general reputation, not by physical assets.

Effective-Interest Method

A method of computing the amortized cost of a bond and of allocating interest expense over its relevant period.

Operating Lease

A lease agreement that allows for the use of an asset but does not convey rights of ownership to the lessee.