In Comparing an MMDA to a NOW Account,the MMDA Does

question 76

Multiple Choice

In comparing an MMDA to a NOW account,the MMDA does all of the following except

• A)it pays a higher interest rate.
• B)MMDA accounts are less liquid.
• C)it provides more limited checking services.
• D)MMDA accounts must maintain a larger balance.

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Definitions:

Scarce Resources

Limited supplies of inputs necessary for production, leading to trade-offs and choices in their allocation.

Capital

Assets or money possessed by an individual or organization, which can be used for initiating a business or investment purposes.

Marginal Rate

The additional cost or benefit associated with producing or consuming one additional unit of a good or service.

Transformation

The process of changing or converting one form or state of something into another, often seen in manufacturing and industry.