A Bank That Borrows from the Fed at 3 Percent

question 45

Multiple Choice

A bank that borrows from the Fed at 3 percent annual interest

• A)must hold 3 percent of its total reserves as required reserves
• B)must hold 97 percent of its total reserves as required reserves
• C)will be able to profit by charging less than 3 percent for its loans
• D)hopes to charge more than 3 percent for its loans
• E)must give up U.S.government securities to secure the loan

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Definitions:

Luxury Watchmaker

A company or individual that designs, manufactures, and sells high-quality, often handmade, watches that are considered to be status symbols.

High-end Watches

Luxury watches that embody superior quality, craftsmanship, and design, often representing status and wealth.

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Brand Loyalty

The tendency of consumers to continuously purchase one brand's products over competing ones due to their trust and satisfaction with the brand.