A Bank's Liquidity Needs Can Best Be Satisfied by Holding

question 106

Multiple Choice

A bank's liquidity needs can best be satisfied by holding

• A)small business loans.
• B)Treasury bills.
• C)long-term Treasury securities.
• D)both small business loans and long-term Treasury securities.

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Definitions:

Wage Subsidies

Financial incentives provided by governments to employers to encourage the hiring of certain workers or to promote employment in specific sectors.

Government Failure

Government failure occurs when government intervention in the economy creates inefficiencies or leads to an allocation of resources that is worse than what the market would have produced on its own.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they can be consumed by everyone and one person's consumption doesn't reduce availability for others.

Quasi-Public Goods

Quasi-public goods are those that exhibit some characteristics of a public good such as non-excludability and non-rivalry but do not fully meet these criteria, often because they can be provided privately for a fee.