Banks Want to Minimize Their Holdings of Excess Reserves Because

question 128

Multiple Choice

Banks want to minimize their holdings of excess reserves because:

• A)they will be penalized by the Federal Reserve System if excess reserves are too high.
• B)required reserves are also minimized when banks minimize their holdings of excess reserves.
• C)the money multiplier becomes too large if the excess reserves are high.
• D)they want to borrow more on the federal funds market.
• E)excess reserves earn no interest.

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Definitions:

J1939 Data Backbones

A type of network protocol used in heavy-duty vehicles for communication among various vehicle systems, based on CAN (Controller Area Network) technology.

Voltage Differential

The difference in electrical potential between two points, important for understanding the flow of electric current in circuits.

Message Packets

Units of data formatted for transmission across network systems, encapsulating the payload and control information for routing.

Multiplexed Data Backbone

A network architecture that allows multiple signals or data streams to be combined and transmitted over a common pathway, enhancing efficiency and reducing wiring complexity.