In Order to Meet a Deficiency of Excess Reserves,a Bank

question 78

Multiple Choice

In order to meet a deficiency of excess reserves,a bank could

• A)buy securities
• B)deposit vault cash with the Fed
• C)turn some of its deposit at the Fed into cash
• D)close some checking accounts
• E)borrow from another bank in the federal funds market

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Definitions:

Direct Material

Raw materials that are consumed in the manufacturing process, directly incorporated into the finished product.

Variable Manufacturing Costs

Expenses that change in proportion to the manufacturing output, including costs related to direct labor, materials, and manufacturing overhead that fluctuates with production volume.

Operating Income

Earnings from a company's core business operations, excluding expenses and revenues from non-operating activities.

Fixed Overhead

The set costs associated with operating a business that does not change in relation to production volume, such as rent, salaries, and insurance.