Raising the Interest Paid on Reserves Has the Effect of Making

question 64

Multiple Choice

Raising the interest paid on reserves has the effect of making it:

• A) More costly for banks to hold excess reserves
• B) Less costly for banks to hold excess reserves
• C) More attractive for banks to lend out their excess reserves
• D) Less attractive for banks to hold required reserves

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Definitions:

Point System

A method of quantifying performance, behavior, or value by assigning points which can then be used for evaluation or reward.

Job Evaluation

A systematic process used to determine the relative value of jobs within an organization, often leading to a fair and equitable compensation structure.

Critical Factors

Essential elements or components that are crucial for the success of a project, process, or evaluation.

External Equity

A principle in compensation that ensures employees are paid comparably to workers in other organizations doing similar jobs.