Banks Make Use of the Federal Funds Market in Part

question 37

Multiple Choice

Banks make use of the federal funds market in part to

• A)pay their tax liabilities.
• B)manage liquidity risk.
• C)deal with moral hazard.
• D)deal with adverse selection.

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Definitions:

Fighting Fair

Engaging in conflict resolution in a manner that is respectful, constructive, and without intent to harm the other party.

Positive Reasons

Justifications or motivations for an action or belief that are beneficial or advantageous.

Principle Of Least Interest

A theory suggesting that in any relationship, the person who demonstrates the least amount of interest has the most control or power.

Relationship Power

The degree of influence or control one partner has over another in a relationship, which can impact decision-making and dynamics between the individuals.