A Potentially Important Difference Between NOW Accounts and Demand Deposits

question 29

Multiple Choice

A potentially important difference between NOW accounts and demand deposits is that NOW accounts

• A)pay interest.
• B)may reserve the right to require seven days' notice prior to making a withdrawal.
• C)have no maturity.
• D)allow unlimited transactions.

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Definitions:

Dummy Variables

Variables created to represent attributes with two or more distinct categories or levels, used in regression analysis.

Nominal Variable

A type of variable with data that can be categorized but not ranked or ordered numerically.

Regression Analysis

A set of statistical processes for estimating the relationships among variables, often to predict a dependent variable from one or more independent variables.

Indicator Variable

A variable used in statistical analyses that adopts a value of 1 if a certain condition is true and 0 if false, often used to represent the presence or absence of a characteristic.