In Situations Where the Required Reserve Shortfall Exceeds 4 Percent

question 17

Multiple Choice

In situations where the required reserve shortfall exceeds 4 percent, the bank may be

• A)assessed explicit monetary penalties by the Federal Reserve Bank.
• B)assessed implicit penalties in the form of more frequent monitoring and examinations.
• C)allowed to carry 4 percent of the required reserves to the next maintenance period.
• D)declared insolvent.
• E)Answers A, B, and C only.

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