A Financial Innovation That Enables Banks to Avoid the "Tax

question 69

Multiple Choice

A financial innovation that enables banks to avoid the "tax" from reserve requirements by taking any balances above a certain amount in a corporation's checking account at the end of the business day and investing them in overnight securities that pay interest is called a ________.

• A) money market mutual fund
• B) deposit rate ceiling
• C) sweep account
• D) disintermediation

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Definitions:

Classical Conditioning

A learning process that occurs through associations between an environmental stimulus and a naturally occurring stimulus.

Observational Learning

A learning process through watching the actions of others and the outcomes of those actions, without direct instruction or experience.

Operant Conditioning

A method of learning that employs rewards and punishments for behavior, emphasizing the modification of behavior through reinforcement.

Conditioned Stimulus

A neutral stimulus that, once linked with an unconditioned stimulus, ultimately evokes a conditioned response.