If a Bank Has Excess Reserves Greater Than the Amount

question 92

Multiple Choice

If a bank has excess reserves greater than the amount of a deposit outflow,the outflow will result in equal reductions in

• A)deposits and reserves.
• B)deposits and loans.
• C)capital and reserves.
• D)capital and loans.

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Definitions:

Output Level

The quantity of goods or services produced by a firm or an economy within a given period.

Total Variable Costs

The sum of expenses that vary directly with the level of production, such as materials and labor costs.

Total Costs

The aggregate amount of money spent on producing goods or delivering services, which includes both constant and fluctuating costs.

Marginal Cost

The cost incurred by producing one more unit of a product, which is pivotal for decision-making regarding production levels.