Which of the Following Allow Banks to Minimize the Cost

question 341

Multiple Choice

Which of the following allow banks to minimize the cost to a business of borrowing?
I. Borrowing long and lending short
II. Raising funds from a large number of depositors
III. Creating money by lending all their reserves

• A) I only
• B) II only
• C) I and III
• D) II and III

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Definitions:

Consideration

Something that has value in the eyes of the law, and which a promisor receives in return for a promise.

Fixed Price

A fixed price refers to a pricing strategy where a specific cost is set for a product or service, not subject to change based on fluctuations in market demand or supply.

Provincial Jurisdiction

The legal authority granted to provincial governments to legislate and govern in certain areas that are not within federal jurisdiction.

Discretionary Income

The amount of an individual's income that is left for spending, investing, or saving after taxes and personal necessities have been paid.