09. When a private bank is faced with a reserve shortfall, a) it can borrow reserves from other banks or sell their more liquid assets such as mortgage and commercial loans. c) Legally, It has only days to shore-up its reserve position. d) Is likely to address the problem by just halting its lending and waiting for their existing loans to be repaid. it will most likely sell its real estate holdings and call-in their mortgages.
09. When a private bank is faced with a reserve shortfall, a) it can borrow reserves from other banks or sell their more liquid assets such as mortgage and commercial loans. c) Legally, It has only days to shore-up its reserve position. d) Is likely to address the problem by just halting its lending and waiting for their existing loans to be repaid. it will most likely sell its real estate holdings and call-in their mortgages.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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