Negotiable Certificates of Deposit Were Developed in Order to

question 44

Multiple Choice

Negotiable certificates of deposit were developed in order to

• A)compete for loan business that had been going to the commercial paper market.
• B)circumvent interest rate regulations on deposits.
• C)increase assets that were acceptable as collateral for discount loans.
• D)circumvent reserve requirements.

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Definitions:

Payments

Transactions or transfers of money in exchange for goods or services, or to fulfill a legal obligation.

Central Planning

A system where the government makes all decisions about the production and allocation of goods and services.

Invisible Hand

A term coined by Adam Smith to describe the self-regulating nature of the marketplace, where individual self-interests unintentionally contribute to the economic well-being of society.

Property Rights

Legal rights to possess, use, and dispose of assets.