When Interest Rates Increase and Normal Cash Holdings Are Decreased

question 96

Multiple Choice

When interest rates increase and normal cash holdings are decreased and invested in securities,this is called:

• A) consumption.
• B) dishoarding.
• C) reinvestment.
• D) disintermediation.

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Definitions:

Adjudication

The legal process of resolving a dispute or deciding a case, often resulting in a final judgment in court.

Electronic Funds Transfer (EFT)

The electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, through computer-based systems.

Proximately Caused

The action that directly leads to a specific effect or outcome, establishing a clear causal link in legal responsibility.

ATM

An Automated Teller Machine that allows bank customers to perform financial transactions, such as withdrawals and deposits, electronically without a human teller.