If the Fed's Actions Cause a Bank's Reserves to Increase

question 58

Multiple Choice

If the Fed's actions cause a bank's reserves to increase, we know the bank will have an incentive to convert the new reserves into loans and bonds because

• A)of government regulation.
• B)reserves are taxed by the federal government.
• C)of moral suasion.
• D)reserves don't earn interest.
• E)the Fed will take the reserves back if they are not used.

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Definitions:

Communicating

The process of exchanging information between two or more devices or components in a system, often essential for the coordination and operation of industrial processes.

Electric Signals

Electrical impulses or waves that carry data or instructions between components in an electronic system, forming the basis of digital communication.

Signal Conditioning

The process of manipulating an analog signal in such a way that it meets the requirements for further processing, such as amplification or filtering.