If the First National Bank Has a Gap Equal to a Negative

question 139

Multiple Choice

If the First National Bank has a gap equal to a negative $30 million,then a 5 percentage point increase in interest rates will cause profits to

• A)increase by $15 million.
• B)increase by $1.5 million.
• C)decline by $15 million.
• D)decline by $1.5 million.

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Definitions:

Complements

Goods or services that are used together, where the use or consumption of one enhances the use or consumption of the other.

Law Of Supply

The Law of Supply states that, all else being equal, an increase in price results in an increase in the quantity supplied.

Quantity Supplied

The supply of a good or service that businesses intend to sell, given a certain price point.

Quantity Supplied

The measure of goods or services that vendors are eager and able to part with at a set price.