Which of the Following Explains Why Banks Try to Keep

question 119

Multiple Choice

Which of the following explains why banks try to keep their holdings of excess reserves low?

• A)To maximize profits.
• B)To keep the money multiplier low.
• C)To escape Fed penalties.
• D)To please bank examiners.

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Definitions:

Norepinephrine

A neurotransmitter and hormone involved in the body's fight or flight response, affecting heart rate, blood pressure, and glucose metabolism.

Neurotransmitter

Chemical substances that transmit signals across a synapse from one neuron to another in the brain and nervous system.

Hormone

A chemical substance produced in the body that influences physiological activity by being transported in tissue fluids such as blood to stimulate specific cells or tissues into action.

Endorphins

Neurotransmitters produced by the brain that act as natural painkillers and are also associated with feelings of pleasure or euphoria.