_____ Is a Reason That People Use Credit

question 11

Multiple Choice

_____ is a reason that people use credit.

• A)Being able to increase disposable income
• B)Being able to provide payments for living beyond one's means
• C)Being able to afford impulse purchases
• D)Greater affordability for a luxurious lifestyle
• E)Being able to meet a financial emergency

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Definitions:

Reserve Ratio

The fraction of depositors' balances that banks must have on hand as cash, a regulation enforced by central banking authorities.

Reserves

Funds or materials set aside or saved for future use or to cover unforeseen expenses; in banking, it refers to the fraction of deposits that a bank keeps in hand to ensure liquidity.

Deposits

Funds placed into an account at a financial institution for safekeeping, which can include savings accounts, checking accounts, and certificates of deposit.

Excess Reserves

Banking reserves that are held by a bank in excess of what is required by regulations or central bank requirements.