When a Bank in Need of Funds for a Few

question 50

Multiple Choice

When a bank in need of funds for a few days sells some of its government securities to a corporation with a temporary excess of funds, then buys them back shortly thereafter, this is a

• A) federal funds loan.
• B) discount window loan.
• C) repurchase agreement.
• D) commercial paper transaction.

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Definitions:

Producer Surplus

The difference between the amount a producer is paid for a good versus the minimum amount they would be willing to accept for the good.

Government Policy

Official strategies or principles that a government adopts and implements to guide decisions and achieve rational outcomes.

Producer Surplus

The discrepancy in the expected versus actual earnings of sellers for goods or services.

Production Quota

A limit set by an organization or government on the amount of a product that can be produced.