Prior to 2008, a bank might have borrowed reserves from another bank because:
A. banks never borrowed from the Fed.
B. it kept its reserves too low and could not meet Fed requirements.
C. borrowing reserves from other banks is the only way to gain access to reserves.
D. it was in danger of becoming insolvent and collapsing.
Ans: B. it kept its reserves too low and could not meet Fed requirements.
You might also like to view...
Which of the following is true of perfect competition but is not true of monopolistic competition?
a. The firm faces a downward-sloping demand curve. b. The firm faces a downward-sloping marginal revenue curve. c. The firm will earn zero economic profit in the long run. d. The firm will produce at a point where price equals marginal cost.
Total allowable catch policies and individual transferable quotas both:
A. limit catch sizes and promote efficiency. B. limit catch sizes, but TACs promote inefficiency. C. promote efficiency, but only TACs limit catch sizes. D. promote efficiency, but only ITQs limit catch sizes.