When a bank issues a loan to a customer:     A) bank assets fall by the amount of the loan.   B) the composition of bank assets changes so that bank reserves increase and the value of bank loans decreases.   C) bank assets rise by the amount of the loan.   D) the composition of bank assets changes so that bank reserves decrease and the value of bank loans increases.

Survey Of Economics
10th Edition
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter19: Money Creation
Section: Chapter Questions
Problem 8SQ
icon
Related questions
Question

When a bank issues a loan to a customer:

 

 

A)

bank assets fall by the amount of the loan.

 

B)

the composition of bank assets changes so that bank reserves increase and the value of bank loans decreases.

 

C)

bank assets rise by the amount of the loan.

 

D)

the composition of bank assets changes so that bank reserves decrease and the value of bank loans increases.

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Banking
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.
Recommended textbooks for you
Survey Of Economics
Survey Of Economics
Economics
ISBN:
9781337111522
Author:
Tucker, Irvin B.
Publisher:
Cengage,
MACROECONOMICS FOR TODAY
MACROECONOMICS FOR TODAY
Economics
ISBN:
9781337613057
Author:
Tucker
Publisher:
CENGAGE L
Economics For Today
Economics For Today
Economics
ISBN:
9781337613040
Author:
Tucker
Publisher:
Cengage Learning
Principles of Economics 2e
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Exploring Economics
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Macroeconomics
Macroeconomics
Economics
ISBN:
9781337617390
Author:
Roger A. Arnold
Publisher:
Cengage Learning