When the Actual Reserve-Deposit Ratio Exceeds the Desired Reserve-Deposit Ratio

question 8

Multiple Choice

When the actual reserve-deposit ratio exceeds the desired reserve-deposit ratio banks:

• A)do nothing because this is a profitable situation.
• B)stop making loans.
• C)send the extra reserves to the central bank.
• D)make more loans.

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Definitions:

Acceptance

In contract law, acceptance refers to the expression of agreement to the terms of an offer, resulting in a contract.

Forbearance To Act

Refers to a legal principle involving the deliberate abstention from enforcing a right.

Contractual Agreement

A legally binding agreement between two or more parties outlining their rights and obligations.

Extensive Problems

Extensive problems refer to a wide range or significant number of issues that are often complex and require considerable effort to resolve.