A Bank Can Reduce Its Total Amount of Loans Outstanding

question 99

Multiple Choice

A bank can reduce its total amount of loans outstanding by

• A) "calling in" loans; that is, by not renewing some loans when they come due.
• B) selling loans to other banks.
• C) selling loans to the Federal Reserve.
• D) doing all of the above.
• E) doing only A and B of the above.

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Definitions:

Permanent Replacement Workers

Employees hired on a permanent basis to substitute for workers who are on strike, ensuring continued operations.

Purchasing Power

The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy.

Unemployment

The total number of people over 16 who are ready, willing, and able to work, who have been unsuccessfully seeking employment.

Closed Shop Agreement

A labor agreement requiring employees to be members of a specific union as a condition of being hired and to remain in the union for the duration of their employment.