Question 12 When loans are repaid at commercial banks, money is created. the net worth of commercial banks increases. money is destroyed. the assets of commercial banks increase.
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KEY QUESTION "When a commercial bank makes loans, it creates money; when loans are repaid, money is destroyed." Fxplain. LO3
Danielle A.
1) In the consolidated balance sheet of the Bank of Canada, loans to chartered banks are: Multiple Choice an asset of the Bank of Canada and chartered banks. an asset of the Bank of Canada and a liability for chartered banks. a liability of the Bank of Canada and chartered banks. a liability of the Bank of Canada and an asset for chartered banks. 2) A $200 price tag on a cashmere sweater in a department store window is an example of money functioning as a: Multiple Choice medium of exchange. standard of deferred payments. unit of account. store of value. 3) Refer to the information below which shows the demand deposits and actual reserves of a banking system. When the desired reserve ratio is 20 percent, the money creating potential of the entire banking system is: (1) (2) (3) Desired Reserve ration, percent Demand deposits Actual Cash reserves 10 $40,000 $10,000 20 40,000 10,000 25 40,000 10,000 30 40,000 10,000 Multiple Choice $6,000 $4,000 $10,000 $8,000
Akash M.
Recommended Textbooks
Principles of Economics
Principles of Microeconomics for AP® Courses
Economics
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