Banks Face Liquidity Risk Because

question 62

Multiple Choice

Banks face liquidity risk because

• A) they can have difficulty meeting their depositor's demands to withdraw money.
• B) they are unable to borrow from the Federal Reserve.
• C) households and businesses may seek to borrow a large amount of funds in a short period of time.
• D) governments tend to run high budget deficits.

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Definitions:

Entrepreneurs

Individuals who create, organize, and manage a business venture, taking on financial risks in the hope of profit.

American Entrepreneur

An American entrepreneur is an individual in the United States who starts and manages a business venture, taking on financial risks in the hope of profit.

Economic Success

The achievement of desired financial outcomes and growth in an economy, often measured by indicators such as GDP growth, employment rates, and living standards.

Innovator

A person or organization that introduces new ideas, products, or methods, leading to change or development in a particular field.