Banks Hold Excess and Secondary Reserves to

question 9

Multiple Choice

Banks hold excess and secondary reserves to

• A)reduce the interest-rate risk problem.
• B)provide for unexpected deposit outflows.
• C)satisfy margin requirements.
• D)achieve higher earnings than they can with loans.

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Definitions:

Ethanol

A renewable fuel made from various plant materials, known as biomass, and used as an alternative to gasoline.

Demand

The desire for specific goods or services accompanied by the ability and readiness to pay for them.

Supply

The total amount of a specific good or service available to consumers, potentially influencing its market price.

Supply Curve

The supply curve is a graphical representation demonstrating the relationship between the price of a good or service and the quantity of that good or service that a supplier is willing and able to supply at those prices.