Banks Sometimes Need Funds Temporarily and Sometimes Have Excess Funds

question 25

Multiple Choice

Banks sometimes need funds temporarily and sometimes have excess funds available. Which of the following is commonly a source of bank funds and a use of bank funds ?

• A)MMDAs
• B)federal funds
• C)the Federal Reserve's lending facility
• D)retail CDs

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Definitions:

Nondiscriminating Monopolist

A monopolist who charges all consumers the same price for its product regardless of the consumer's willingness or ability to pay more.

Price Discriminate

The strategy of selling the same product to different customers at different prices based on what the seller believes each customer is willing to pay.

Marginal Revenue Curve

A graphical representation that shows how marginal revenue varies as output level changes, typically downward sloping for firms in competitive markets.

Demand Curve

A chart that displays how the cost of an item correlates with the amount of that item buyers are prepared to buy at different price levels.