Which of the Following Is a Reason for Diminishing Liquidity

question 50

Multiple Choice

Which of the following is a reason for diminishing liquidity in modern corporations?

• A) high interest rates
• B) better utilization of cash via computers
• C) inflation pushes more cash into inventory
• D) all of the choices are reasons for diminishing liquidity

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Definitions:

Federal Reserve District Banks

The 12 regional banks of the Federal Reserve System in the United States, each responsible for implementing the central bank's monetary policy within its specific district.

Federal Reserve Board

The governing body of the Federal Reserve System, responsible for overseeing U.S. monetary policy and financial institutions.

Congress

The national legislative body of a country, particularly in the United States, consisting of two houses: the Senate and the House of Representatives.

Federal Funds Rate

The interest rate at which depository institutions lend reserve balances to other depository institutions overnight, on an uncollateralized basis.