Which One of the Following Was NOT a Cause for the Creation

question 6

Multiple Choice

Which one of the following was NOT a cause for the creation of the Eurodollar market?

• A)reserve requirements that lower a bank's profits
• B)special charges and taxes levied on domestic banking transactions
• C)interest rate ceilings on deposits and loans
• D)the lack of a requirement to hold a fractional reserve at the Federal Reserve of all deposits

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Definitions:

Decreasing-Cost Industry

An industry where the average cost of production decreases as the industry's output increases, often due to economies of scale.

Long-Run Supply Curve

A graphical representation showing the relationship between the market price of a good and the quantity of it that producers are willing to supply when all production inputs are variable.

Downward-Sloping

Describes a line or curve on a graph that descends from left to right, indicating a negative relationship between two variables.

Purely Competitive

A market scenario where all participants sell indistinguishable goods, ensuring no one seller can influence prices, creating an ideal competition.