Depository Institution Create Liquidity When They

question 332

Multiple Choice

Depository institution create liquidity when they

• A) buy assets that are liquid.
• B) borrow short and lend long.
• C) have liabilities that are illiquid.
• D) borrow long and lend short.

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Definitions:

Demand Curve

A visual depiction that illustrates the correlation between a product's price and the amount consumers are willing to buy.

Total Cost Curve

A graphical representation showing how the total cost of producing a good changes as the quantity produced changes.

Marginal Revenue Curve

A graph that shows the change in total revenue for each unit sold, illustrating how marginal revenue changes as output changes.

Multiplant Monopolist

A monopolistic firm that operates more than one production facility in different geographic locations to maximize profits and maybe meet differentiated demand.