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.
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.
Chapter19: Money Creation
Section: Chapter Questions
Problem 8SQ
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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. |
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