Because Depository Institutions Earn No Interest on Reserves

question 112

Multiple Choice

Because depository institutions earn no interest on reserves

• A) profit maximizing behavior motivates them to lend out excess reserves to the fullest extent consistent with their liquidity requirements; and when interest rates are high, this motivation is especially strong.
• B) profit maximizing behavior motivates them to lend out excess reserves to the fullest extent consistent with their liquidity requirements; and when interest rates are low, this motivation is especially strong.
• C) profit maximizing behavior motivates them to retain excess reserves to the fullest extent consistent with their liquidity requirements; and when interest rates are low, this motivation is especially strong.
• D) profit maximizing behavior motivates them to retain excess reserves to the fullest extent consistent with their liquidity requirements; and when interest rates are high, this motivation is especially strong.

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Definitions:

Nursing Diagnoses

Clinical judgments about individual, family, or community experiences/responses to actual or potential health problems/life processes which provide the basis for selecting nursing interventions.

Impaired Verbal Communication

A condition where an individual has difficulty in expressing ideas or feelings through speech, often due to cognitive, neurological, or physiological reasons.

Risk For Injury

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Depression

A mental health disorder characterized by persistent feelings of sadness, hopelessness, and a lack of interest or pleasure in activities.