Explain How a Regulation Requiring Banks to Keep a Given

question 112

Essay

Explain how a regulation requiring banks to keep a given percentage of deposits in an account paying below market interest rates at the Fed is really a tax on banks.

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Definitions:

Bypass Surgery

A surgical procedure that redirects blood flow from one area to another by circumventing blocked or narrowed vessels.

Obesity

A medical condition characterized by an excess of body fat to the extent that it may have a negative effect on health.

Hunger-Arousing Hormone

A chemical substance produced in the body that regulates hunger, such as ghrelin.

Orexin

A neurotransmitter that is crucial in controlling wakefulness, hunger, and levels of excitement.