Answer:
cohesion
Explanation:
the action or fact of forming a united whole.
Answer:
1) The transaction cost of both he bank deposit and mutual fund are almost equal as transaction in both can be made by visiting a branch or using internet banking or brokering.
2) The risk for the bank deposits are lower thank mutual funds because even thought the mutual fund is highly diversified, its value can still decline because of changes in market or some market crash like the 2008 recession, where as the money in the bank remains intact
3) The liquidity is higher for bank deposits because money can be withdrawn instantly, whenever the depositor wants, where as the liquidity for mutual funds is a bit lower as it takes a couple of business days to make transactions.
Explanation:
Answer:
C) The Fed can increase the equilibrium federal funds rate by decreasing the supply of reserves.
Explanation:
The Federal fund rate is the interest rate at which the banks use to lend money to each other overnight. It can simply be called the interest rate for interbank reserve loans. It can also be the interest rate which is used to conduct monetary policies.
Here, money demanded is equal to the amount of money supplied. The Fed can change the equilibrum funds rate by decreasing the money supplied to the banks, which in turn, makes the federal fund demand increase and the federal also fund rate increases.
