Asked Apr 11, 2019

When a bank issues a loan to a customer:




bank assets fall by the amount of the loan.



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



bank assets rise by the amount of the loan.



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


Expert Answer

Step 1

Bank is financial institution that controlled and monitor by the central bank of the respective countries. Banks receives deposits from the public. When banks provide loans to the b...

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