Banks Try to Keep Their Level of Excess Reserves Low

question 143

Multiple Choice

Banks try to keep their level of excess reserves low because

• A)the Fed charges a penalty for holdings of excess reserves.
• B)they are concerned that the money multiplier will become too large.
• C)they wish to maximize profits.
• D)bank regulators levy fines on the amount of excess reserves.

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Definitions:

Infinite Recursion

A situation in which a function or method calls itself without an exit condition, leading to a stack overflow error.

Base Case

In recursive programming, a condition that stops the recursion by not making any further calls.

Recursive Methods

Functions or methods in programming that solve problems by calling themselves with modified arguments, often with a base case to end the recursion.

Stopping Case

A condition used to terminate a recursive function, preventing it from running indefinitely.