Which of the Below Statements Is TRUE

question 5

Multiple Choice

Which of the below statements is TRUE?

• A) A small amount of interest is earned on federal funds.
• B) Typically, larger banks have excess reserves, while money center banks find themselves short of reserves and must make up the shortfall.
• C) Most transactions involving fed funds last for only one night; that is, a bank with insufficient reserves that borrows excess reserves from another financial institution will typically do so for the period of one full day.
• D) The repo, which consists of the sale of a security, will provide funds for a long period of time.

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Definitions:

Marginal Utility

The extra pleasure or advantage obtained from the consumption of an additional unit of a product or service.

Beers

Alcoholic beverages made from fermented grains like barley, often flavored with hops and served as a popular social drink.

Oysters

Aquatic shellfish that are cultivated or harvested for food, pearls, and shell products.

Indeterminate

describes a situation or outcome that is not precisely determined, fixed, or established, often due to insufficient information or inherent variability.