If a Bank Has a Negative Repricing Gap,falling Interest Rates

question 53

True/False

If a bank has a negative repricing gap,falling interest rates increase profitability.

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Definitions:

Income Elasticity Coefficient

A measure that shows how much the demand for a good or service changes in response to a change in consumers' income.

Recessions

are characterized by a significant decline in economic activity spread across the economy, lasting more than a few months, visible in industrial production, employment, real income, and wholesale-retail trade.

Substitutes Goods

Products or services that can replace or be used in place of another to fulfill the same need or desire.

Complementary Goods

Products or services that are consumed together because the use of one enhances the use or value of the other.