essment.estion 25On a bank's T-account,both deposits and reserves are assets.a.both deposits and reserves are liabilities.b.deposits are assets and reserves are liabilities.C.d.reserves are assets and deposits are liabilities.

Banks T account shows the classification of asset and liabilities.

Answered: On a bank's T-account,

Business

Economics

On a bank's T-account,

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter14: Banking And The Money Supply

Section: Chapter Questions

Problem 2.3P

See similar textbooks

Related questions

Q: How does the credit card company calculate the interest payment?

A: The credit card has been an important tool to increase the purchasing power. This facility has…

Q: Describe the process of Borrowing with Credit Cards?

A: The credit card has been an important tool to increase the purchasing power. This facility has…

Q: Two weeks later your mom loses her credit card at the grocery store. What can an identity thief do…

A: Credit card is the plastic money through which you can buy things at the moment and pay later.

Q: Give an example of a loan repayment plan?

A: A loan repayment plan shows the way in which loan will be repaid. It explains in detail the number…

Q: Why should you talk to your banker before beginning to look for a home? to get a building inspector…

A: Although looking for a home can be exciting and enjoyable, serious homebuyers should begin their…

Q: How fast Can someone get a bank loan?

A: A bank takes into account several things when considering whether or not to extend a loan to…

Q: How much of account verification costs will be assigned to Department A?

A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…

Q: commodity money that has been used in different times in the history

A: Money can be defined as an asset with monetary characteristics which is generally accepted as a…

Q: Please answer fast

A: IS curve is a curve that shows the inverse relationship between the interest rate and disposable…

Q: a reserve requirement?

A: The policy in which there is a set of tools that a nation's central bank uses to promote sustainable…

Q: It is not smart to make small purchases on a credit card because they can pile up and end up costing…

A: When talking about credit card, it is the facility provided by financial institutions to the people…

Q: You borrow $1,000 from a bank to buy a car to use in your pizza delivery business. IS THIS AND…

A: Savings are a type of income which is kept by the consumer after paying all his expenditure. When…

Q: Explain why someone might want to put a “red flag” on their own credit report.

A: A red flag refers to a warning that is put on the credit report if something suspicious, fraudulent,…

Q: Draw or write a diagram showing how the money you put into bank account works to the benefit of the…

A: As an individual when the money is put in the bank account it would benefit anyone as the money is…

Q: What are commercial loans?

A: Loan is a type of debt instrument in which a sum of money is borrowed by an individual or a firm…

Q: Does IRS have my direct deposit info?

A: IRS stands for Internal Revenue Service which represents the federal government's revenue services,…

Q: What are the potential savings?

A: Total disposable income of a person can be used for consumption and investment expenditures and for…

Q: How is money can be loaned and repaid?

A: A loan is when an amount of money is given to another party in exchange for repayment of the loan…

Q: What is the cheapest loan?

A: A loan is the lending of money by an individual or a group to another individual or a firm, with an…

Q: Importance of saving money

A: Money: It refers to the cash which is available to the people. Money can be used for buying goods…

Q: still make all interest payments? r

A: *Answer: The debt-to-GDP ratio is the percentage of a country's debt to its GDP. It is used to…

Q: Debit cards are considered as __________ money

A: According to time, place and different circumstances money has evolved itself through many different…

Q: what does it mean when banks are paying people to get loans?

A: The financial system of the nation is considered to be one of the most prominent, and important…

Q: Write the different loan terms?

A: A loan is when one or more people, organisations, or other institutions lend money to other persons,…

Q: History of money

A: The word money means a medium of material where one can exchange goods and services.

Q: How Do You Manage Your Credit Card Debt?

A: Credit cards have become a everyday part of our lives and is convenient to use. It is often, that we…

Q: What would be the value of APS if savings is half that of income.

A: The data presented is that the savings of the household is half that of income. So if income is Y…

Q: credit unions differ from savings institutions

A: More number of saving banks come together are called savings institutions. More number of loan…

Q: Money

A: Money is the main & most important ‘medium of exchange’ in an economy. Through these medium…

Q: How do investment banks works?

A: Banking is an integral part of economics, which accepts deposits from people and generate loans for…

Q: What does the interest rate you determine represent?

A: The interest is a specific percentage of the principal amount that is lent, borrowed, or deposited…

Q: Please check if information is accurate. Please include stuff I have missed.

A: What is (RRSP) A Registered Retirement Savings Plan (RRSP) is a retirement reserve fund and…

Q: How much should Heather repay her grandmother?

A: a) S.I formula to calculate amount is A=P x (1+rt) = 5000 x (1.14) =$5700

Q: different types of money

A: Money is defined as an economic unit which acts as a general recognized medium of exchange for…

Q: List the elements of Transactions involving Interest?

A: Interest is a charge made to a lender in addition to the principal by a borrower, and it is a…

Q: M1 includes savings deposits. a. T b. F

A: Meaning of Money Supply: The term money supply refers to the situation under which the overall…

Q: What is a transfer payment?

A: A transfer payment is a unilateral payment transferred to a person who has not exchanged money,…

Q: What is a bond?

A: Bonds are fixed income securities and acts as a loan to a borrower. It is a kind of contractual…

Q: Money flow

A: Money flow is determined by calculating the daily volume by the average of the high, medium, and…

Q: annual interest cost on deposits

A: The leverage is decided basis the loans to equity ratio. Narrow bank is leveraged and wide bank is…

Q: Which client had to have the financial services flow sent to them?

A: The economy is comprised of a wide range of sections called sectors. These sectors are contained…

Q: How does amortization help in making loans affordable?

A: Concept Amortization is the technique of repaying a loan in monthly interest and principal…

Q: bank

A: Bank Deposit creation is limited by reserve requirement. Explanation Money refers to anything…

Q: Your merchant fee is 2%. Your customers paid you $120,000 through credit cards. What fee must you…

A: The fee that needs to be paid to the credit card company can be calculated by calculating the…

Question

essment.
estion 25
On a bank's T-account,
both deposits and reserves are assets.
a.
both deposits and reserves are liabilities.
b.
deposits are assets and reserves are liabilities.
C.
d.
reserves are assets and deposits are liabilities.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

A bank has deposits of 400. It holds reserves of 50. It has purchased government bonds worth 70. It has made loans of 500. Set up a T-account balance sheet for the bank, with assets and liabilities, and calculate the banks net worth.
Bank runs are often described as self-fulfilling prophecies. Why is this phrase appropriate to bank runs?
List the three traditional tools that a central bank has for controlling the money supply.
Humongous Bank is the only bank in the economy. The people in this economy have 20 million in money, and they deposit all their money in Humongous Bank. Humongous Bank decides on a policy of holding 100 reserves. Draw a T-account for the bank. Humongous Bank is required to hold 5 of its existing 20 million as reserves, and to loan out the rest. Draw a T-account for the bank after it has made its first round of loans. Assume that Humongous bank is part of a multibank system. How much will money supply increase with that original 19 million loan?
A bank with 100 million in deposits 15 million of cash in the bank,10 million in deposit with central bank,15 million in government securities in it vault .It total reserves equals? (a).10 (b).15 (c)25 (d)40
Hey (Depository Institutions ) Explain why a bank typically holds as reserves only a fraction of its deposit liabilities? In light of this arrangement, why is it important that depositors have confidence in their bank's health?
12. A bank has reserves of $40, loans of $110, deposits of $90, and owners’ equity of $60. Which of the following represents the bank’s total assets? $180 $110 $130 $150
A6)After the collapse of a bank such as SVB, businesses find it harder to get loans. True Or False A7) Use the balance sheet of a bank below to answer the following. The duration of asset is 1.5 years, the duration of liabilities 2 years. Assets _Liabilities_______________________ Required Reserves 8 m Money Market Deposits 50 m Excess Reserves 7 m 3-year CDs 60 m T-bills 85 m Capital 10 m Mortgages 15 m Commercial Paper 5m Select the amount of RSA. A)90 m B)93 m C)5 m D)100 m A8) Use the balance sheet of a bank below to answer the following. The duration of asset is 1.5 years, the duration of liabilities 2 years. Assets _Liabilities_______________________ Required Reserves 8 m Money Market Deposits 50 m Excess Reserves 7 m 3-year CDs 60 m T-bills 85 m Capital 10 m Mortgages 15m Commercial Loans 5 If the interest rate goes down by 1%, its net worth goes ________. A)down B)nothing happens C)sideways D)up A9) Use the balance sheet of a bank below to answer the following. The duration of…
Stealth bank has deposits of $300 million. It holds reserves of $20 million and has purchased government bonds worth $300 million. The bank's loans, if sold at current market value, would be worth $600 million. What does Stealth bank’s net worth equal? a. $1.22 billion b. $920 million c. $620 million d. $20 million