Which of These Is Not a Likely Result If Banks

question 33

Multiple Choice

Which of these is not a likely result if banks hold onto excess reserves?

• A)The economy may enter into a recession.
• B)Demands for loans may increase, but lending will be insufficient.
• C)Demand for loans will increase, and business activity will increase.
• D)Consumers and businesses will not be able to get loans as easily as before.

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Definitions:

Direct Materials Cost

The total cost of raw materials that can be directly attributed to the production process of a product.

Factory Machinery

Equipment and machines used in a factory to increase production efficiency and manufacture goods.

Factory Overhead Cost

All indirect costs associated with manufacturing, such as utilities, rent, and maintenance not directly tied to production.

Construction Contractor

A business or individual that contracts to perform construction services, often involving both labor and materials for building projects.