This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Explain what is meant by the phrase a bank's balancing act. What will be an ideal ... (Read 94 times)

Zoey63294

  • Hero Member
  • *****
  • Posts: 539
on: Jun 29, 2018
Explain what is meant by the phrase a bank's balancing act.
 
  What will be an ideal response?

Question 2

You want to purchase two umbrellas. The price is 40 per umbrella, 2 for 60, 3 for 75. What will be the marginal cost to you of buying a third umbrella?
 
  A) 75
  B) 25
  C) 20
  D) 15
  E) 10


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Chocorrol77

  • Sr. Member
  • ****
  • Posts: 313
Reply #1 on: Jun 29, 2018
Answer to Question 1

Banks accept deposits and make loans with the funds they receive from the deposits. Banks profit if the interest rate they charge on their loans exceeds the interest rate they pay on their deposits. Loans are made for a specified length of time and cannot be called in before they are due. However, deposits can be withdrawn at any time by the depositors. Therefore a bank must perform a balancing act: It is risky to lend too much of the deposits and run the risk of mass withdrawals that would create a crisis for the bank. However, it is by making loans that the bank earns a profit.

Answer to Question 2

D


Zoey63294

  • Member
  • Posts: 539
Reply 2 on: Jun 29, 2018
Thanks for the timely response, appreciate it

carojassy25

  • Member
  • Posts: 299
Reply 3 on: Yesterday
Great answer, keep it coming :)

« previous next »
 

Did you know?

Lower drug doses for elderly patients should be used first, with titrations of the dose as tolerated to prevent unwanted drug-related pharmacodynamic effects.

Did you know?

Astigmatism is the most common vision problem. It may accompany nearsightedness or farsightedness. It is usually caused by an irregularly shaped cornea, but sometimes it is the result of an irregularly shaped lens. Either type can be corrected by eyeglasses, contact lenses, or refractive surgery.

Did you know?

A serious new warning has been established for pregnant women against taking ACE inhibitors during pregnancy. In the study, the risk of major birth defects in children whose mothers took ACE inhibitors during the first trimester was nearly three times higher than in children whose mothers didn't take ACE inhibitors. Physicians can prescribe alternative medications for pregnant women who have symptoms of high blood pressure.

Did you know?

Human kidneys will clean about 1 million gallons of blood in an average lifetime.

Did you know?

Only 12 hours after an egg cell is fertilized by a sperm cell, the egg cell starts to divide. As it continues to divide, it moves along the fallopian tube toward the uterus at about 1 inch per day.

Balancing selection and heterozygote advantage. Balancing selection and heterozygote advantage.
What are examples of ideal forms? What are examples of ideal forms?
A Radio Telescope in Green Bank, West Virginia A Radio Telescope in Green Bank, West Virginia
Explain how it can be desirable from an intertemporal perspective for a country run a current ... Explain how it can be desirable from an intertemporal perspective for a country run a current ...
Explain the assumptions that must be satisfied in order to validly use the one-way ANOVA ... Explain the assumptions that must be satisfied in order to validly use the one-way ANOVA ...
Raman has a line of credit loan with the ICICI bank. The initial loan balance was $72000.00. ... Raman has a line of credit loan with the ICICI bank. The initial loan balance was $72000.00. ...
Video: Glomerubular filtrate rate -pressures that affect GFR and net filtration pressure

For a complete list of videos, visit our video library