18-102 Why Are Passbook Savings Generally Less Liquid Than Demand

question 85

Multiple Choice

18-102 Why are passbook savings generally less liquid than demand deposits and NOW accounts?

• A)They are noncheckable.
• B)They usually involve physical presence at the institution for withdrawal.
• C)The DI has the legal power to delay payment for as long as one month.
• D)They tend to pay higher interest rates than demand deposits and NOW accounts.
• E)All of the above.

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Definitions:

Quantity Demanded

Reflects the total amount of a product that consumers are willing to buy at a given price point, during a specified time period.

Competitive Market

A market structure characterized by a large number of small firms, free entry and exit, and a homogeneous product, where no single firm can influence the market price.

Equilibrium

A condition or state in which market supply and demand balance each other, and as a result, prices become stable.

Buffalo Meat

The meat derived from buffaloes, considered a source of protein and widely consumed in certain cultures and countries.