In order for a bank to earn as much profit as possible, its excess reserves should be:
a. equal to its required reserves.
b. as small as possible.
c. less than its vault cash.
d. growing at a constant rate.
b
You might also like to view...
How many quarters (3-month periods) must the "real" GDP decline to have the economy considered to be in a recession?
A) 1 B) 2 C) 3 D) 4
Phases and turning points of the business cycle are expansion, peak, recession and trough
Indicate whether the statement is true or false
Under the price-specie-flow mechanism, what happens when, say, Germany's current account surplus is greater than its non-reserve capital account deficits?
A) German loans will finance all foreign net imports. B) Automatic drop in German domestic prices and rise in foreign prices. C) Gold reserves will flow into Germany. D) Gold reserves will flow out of Germany. E) Germany will experience a deficit.
If you invest in a foreign company by buying 28 percent of its shares of stock, you have engaged in
A) portfolio investment. B) moral hazard. C) foreign direct investment. D) adverse selection.