In the Absence of Regulation,banks Would Probably Hold

question 51

Multiple Choice

In the absence of regulation,banks would probably hold

• A)too much capital,reducing the efficiency of the payments system.
• B)too much capital,reducing the profitability of banks.
• C)too little capital.
• D)too much capital,making it more difficult to obtain loans.

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Definitions:

Market Supply

The total amount of a product or service that is available for purchase at various price points in a market at a given time.

Perfectly Elastic

A situation where the demand or supply for a good or service is infinitely responsive to changes in price.

Long-Run Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied after all inputs have been adjusted to their optimal levels.

Increase in Demand

A shift in the demand curve to the right, signifying that consumers are willing to purchase more of a good or service at the same prices, due to factors like increased income or changes in tastes.