Which of the Following Accurately Describes the Relationship Between Excess

question 53

Multiple Choice

Which of the following accurately describes the relationship between excess reserves and checkable deposits following the financial crisis of 2007-2009?

• A) Excess reserves declined as the excess reserve ratio returned to near zero.
• B) Excess reserves rose to nearly one-third of checkable deposits.
• C) Excess reserves approached the same level as checkable deposits.
• D) Excess reserves exceeded checkable deposits.

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Definitions:

Initial Endowment

The initial quantity of goods, services, assets, or resources that an individual, institution, or economy possesses.

Pareto Optimal

A situation where resources are distributed in such a manner that it's not feasible to rearrange them to benefit someone without adversely affecting at least another individual or preference standard.

Initial Endowment

The initial quantity of goods, resources, or wealth that an individual or entity possesses at the start of a period or game.

Pareto Optimal

A distribution of resources from which it is impossible to reallocate in order to make any individual better off without making at least one individual worse off.