Which of the Following Is Not a Reason Why Interbank

question 11

Multiple Choice

Which of the following is not a reason why interbank lending dried up during the financial crisis of 2007-2009?

• A)Banks preferred to hold on to their liquid assets in case their own need for them increased.
• B)Banks grew increasingly concerned about the ability of their trading partners to repay the loans.
• C)The increased cost of loans.
• D)The Fed grew increasingly wary of making liquidity available to banks.

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Definitions:

Factory Equipment

Durable goods or machinery used in manufacturing processes, typically involving production or maintenance tasks.

Indirect Method

A type of cash flow reporting in financial statements where net income is adjusted for changes in balance sheet accounts to calculate the cash flow from operating activities.

Financing Activities

Transactions that result in changes in the size and composition of the equity and borrowings of an entity, such as issuing stock or obtaining loans.

Mortgage Notes Payable

A form of long-term debt where the borrower agrees to pay back a loan used to purchase real estate, along with interest, over a specified period.