QUESTION 11 uppose that a new customer opens a checking account and a saving account, placing $50,000 in each. Later, the ank makes a loan of $100,000 to a business firm. For this bank a. assets increased by $100,000 because the checking and saving accounts are assets, and liabilities increased by $100,000 because the loan is a liability. Ob.assets increased by $50,000 because the saving account is an asset, while liabilities increased by $50.000 because the checking account is a liability. Ⓒassets remained unchanged but liabilities increased by $100,000 because of the loan. Od. assets increased by $100,000 because the loan is an asset, and liabilities increased by $100,000 checking and saving accounts are liabilities. use the

QUESTION 11 uppose that a new customer opens a checking account and a saving account, placing $50,000 in each. Later, the ank makes a loan of $100,000 to a business firm. For this bank a. assets increased by $100,000 because the checking and saving accounts are assets, and liabilities increased by $100,000 because the loan is a liability. Ob.assets increased by $50,000 because the saving account is an asset, while liabilities increased by $50.000 because the checking account is a liability. Ⓒassets remained unchanged but liabilities increased by $100,000 because of the loan. Od. assets increased by $100,000 because the loan is an asset, and liabilities increased by $100,000 checking and saving accounts are liabilities. use the

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter12: Money, Banking And The Financial System

Section: Chapter Questions

Problem 3WNG

See similar textbooks

Similar questions

1. A banks assets can be described as the a. Value of the loans and the estimates about the risk that customers will not repay those loans b. Value of the loans and the estimates about the risk that customers will repay those loans c. Value of the loans and the estimates about the risk that firms will purchase those loans d. Value of the loans and the estimate about the risk that firms will repay those loans 2. Banks are able to create money in the economy if a. Banks loan out there excess reserves b. Banks do not loan out part of their excess reserves c. Banks hold all of their deposits as required reserves d. Banks purchase US government securities with all of their excess reserves 3. The characteristic of money that is acceptable to make purchases today that will be paid in the future is known as a a. Store of value b. Standard of deferred payment c. Unit of account d. Transaction cost
Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 32Deposits 205Loans 150 Securities 53Other $X Using the balance sheet above, find the level of required reserves for this bank if the required reserve ratio = 8%(Give answers to 2 decimal places as needed)
Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 44Deposits 255Loans 155 Securities 51Other $X Using the balance sheet above, find the level of excess reserves this bank is holding if the required reserve ratio = 6%(Give answers to 2 decimal places as needed)
Corry has an income of $80,000 that he is willing to spend over a year. If his bank account's interest rate is 3.05% and the cost associated for him to visit the bank is $5.00. What is Corry's average money holding? O a. $488.00 O b. $2,560.74 O c. $5,000.00O O d. $16.00 O Type here to search 24
6. Which of the following is liability ona bank's balance sheet? a. a certificate of deposit b. consumer loans c. physical capital d. Treasury securities e. all of the above
BALANCE SHEET OF BANK A (S IN MILLIONS) ASSETS LIABILITIES and NET WORTH Reserves (Cash/Reserves at Fed) 550 Demand Deposits $100 Losns 20 Govt. Securities 90 Net Worth (Owners' Equity) What is the net worth of this bank? 2. If the required reserve is 10%, what is the amount of REQUIRED RESERVES that this bank must bold? 3. What then is the mount of EXCESS RESERVES that this bank is now holding? How much does this bank have available for NEW LOANS? 5. If the required reserve is increased to 20%, whal is the amount of REQUIRED RESERVES that this bank must bold?
4. Which of the following is most likely a financial security? a. Foreign currency O b. Insurance plan c. Commodities d. Preferred share O e. None of the above
16. A debit card differs from a credit card in that Question 16 options: a) a credit card is a loan while for a debit card purchase, payment is made immediately. b) a debit card is a loan while for a credit card purchase, payment is made immediately. c) a debit card is a long-term loan while a credit card is a short-term loan. d) a credit card is a long-term loan while a debit card is a short-term loan.
What is the role of a commercial bank? O a. To create money through the banking system O b. To maximize profits for its shareholders O c. To take customers' deposits and make loans O d. All of the answers are correct
An account issued by banks yielding a market rate of interest with a minimum balance requirement and a limit on transactions is a Select one: a. certificate of deposit. b. money market deposit account. c. savings deposit. d. time deposit.
7. What economic functions do financial intermediaries perform?
Consider the following balance sheet of Berjaya Bank. The required reserve ratio on demand deposits is 8%. Berjaya Bank Aset / Assets (million $) Rizab / Reserves Pinjaman / Loans Sekuriti / Securities Liabiliti / Liabilities (million $) Deposit semasa Demand deposits Modal bank / Net Worth 30 290 150 140 30 1. Calculate the bank's excess reserves 2. Suppose Berjaya Bank sells $40 million of its securities to the central bank. Show the balance sheet of Berjaya Bank after this transaction