A Bank Is Less Likely to Borrow from the Central

question 162

Multiple Choice

A bank is less likely to borrow from the central bank when the __________ falls relative to the __________.

• A) discount rate; required reserve ratio
• B) excess reserve; required reserves
• C) discount rate; federal funds rate
• D) federal funds rate; discount rate

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Definitions:

Majority Rule

A principle in democracy stating that the decisions and choices of the greater number of participants should guide the actions and policies of the group.

Integrated Contracts

An integrated contract is a written agreement that constitutes the final and complete understanding between parties, encompassing all terms and conditions.

Parol Evidence Rule

A legal principle that prevents the parties to a written contract from presenting extrinsic evidence of terms of the agreement that contradict, modify, or vary contractual terms.

Written Agreement

A formalized contract between parties that is expressed in written form and signed to evidence the agreement.