To the Extent a Bank Holds Excess Reserves,which of the Following

question 33

Multiple Choice

To the extent a bank holds excess reserves,which of the following is a consequence?

• A) The simple money multiplier is smaller than it would be if only the required reserve were held.
• B) The total amount of loans is larger than it would be if only the required reserve were held.
• C) The simple money multiplier is larger than it would be if only the required reserve were held.
• D) The total liabilities for an individual bank is larger than it would be if only the required reserve were held.
• E) Total assets for an individual bank is smaller than it would be if only the required reserve were held.

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Definitions:

Horizontal Merger

A merger between two or more competitors producing the same or similar products.

Gaskets

Mechanical seals that fill the space between two or more mating surfaces, generally to prevent leakage from or into the joined objects while under compression.

Market Power

The ability of a company or entity to control prices or exclude competition in a particular market.

Bid Rigging

An illegal agreement between parties to conspire to fix the outcomes of bidding processes to benefit all involved parties unfairly.