Loans Made in the Federal Funds Market

question 8

Multiple Choice

Loans made in the federal funds market:

• A) are highly collateralized.
• B) are made by the Federal Reserve System to the bank within 24 hours.
• C) are unsecured loans.
• D) are insured by the FDIC.

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Definitions:

Fixed Costs

Costs that do not vary with the level of production or business activity, remaining constant even when output changes.

Variable Cost

Expenses that change in proportion to the activity or volume of business.

Persons Served

A term often used in service delivery and nonprofit sectors to refer to the number of individuals who receive services or benefits from a program.

Cost Behavior

Refers to the way different types of production costs change when there is a change in the level of production.