If a Bank Has Excess Reserves Greater Than the Amount

question 92

Multiple Choice

If a bank has excess reserves greater than the amount of a deposit outflow,the outflow will result in equal reductions in

• A)deposits and reserves.
• B)deposits and loans.
• C)capital and reserves.
• D)capital and loans.

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Definitions:

Additional Shares

Shares issued by a company in addition to its existing shares, often to raise extra capital.

Financial Reporting

Generating documents that communicate a company's economic situation to its leadership, shareholders, and regulatory agencies.

External Decision Makers

Individuals or organizations outside of a company (e.g., investors, creditors, regulators) who use the company’s financial information to make decisions about engaging with the company.

Common Stock

Represents ownership shares in a corporation, giving shareholders the right to vote on corporate matters and to receive dividends.