Banks use repurchase agreements to
A) ensure that payments on consumer loans are made on time.
B) borrow funds from business firms or other banks.
C) guard against price fluctuations on long-term bonds.
D) ensure that they always have enough funds on hand to meet their federal tax liabilities.
B
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The advantages of maintaining monopolies:
A. always outweighs the total welfare costs due to lost surplus. B. sometimes outweighs the total welfare costs due to lost surplus. C. never outweighs the total welfare costs due to lost surplus. D. is a normative argument that has no right answer.
The ________ multiplier is defined as the quantity of money that the banking system can generate from each $1 of bank reserves.
a. fiscal b. production c. money d. banking
Which one of the following would count as investment in the national income accounts?
a. purchase of a new airplane by an airline b. purchase of a U.S. government bond c. purchase of 100 shares of Wal-Mart stock d. purchase of an existing house
Which of the following is included in M2 but not in M1?
a. demand deposits
b. corporate bonds
c. large time deposits
d. money market mutual funds