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sgy_89 sgy_89
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6 years ago
Each bank must limit its loans to the amount of its excess reserves because
A) loans are less profitable than other investments, such as government securities.
B) additional transactions would tend to reduce the money supply.
C) additional loans would be likely to antagonize rival banks, leading to competition on loan rates.
D) when customers spend the money they have borrowed, the bank is likely to lose reserves to other banks.
E) this limits the possibility of making "bad" loans that will not be repaid.
Textbook 
Introduction to Economic Reasoning

Introduction to Economic Reasoning


Edition: 8th
Author:
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VilaVila
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sgy_89 Author
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6 years ago
Smart ... Thanks!
sakoon
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Yesterday
Helped a lot
alpheratz
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2 hours ago
Thanks
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