What are the largest asset and the largest liability of a typical bank?
A. Loans of the largest assets and deposits are the largest liability of a typical bank
B. Reserves are the largest asset and deposits are the largest liability of a typical bank
C. Loans of the largest liability and deposits are the largest asset of a typical bank
Ans: A. Loans of the largest assets and deposits are the largest liability of a typical bank
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Money will fail to serve as a medium of exchange if it ceases to be a store of value
Indicate whether the statement is true or false
According to the Taylor rule, if output is above its full-employment level and inflation is less than 2%
A) the Fed should raise the Fed funds rate above 4%. B) the Fed should reduce the Fed funds rate below 4%. C) the Fed should make the Fed funds rate exactly 4%. D) what the Fed should do is ambiguous.
The term "near monies" refers to which of the following? a. Savings and small time deposits, which (unlike currency and checkable deposits) are not immediately available as money in a transaction. b. Mexican pesos and Canadian dollars – the money used by our nearest neighbors
c. Counterfeit money that closely approximates the appearance of real money. d. None of the answers above are correct.
If Japan experiences a period of deflation and the United States does not, what will happen in the United States?
a. an increase in aggregate supply b. a decrease in aggregate supply c. a decrease in aggregate demand d. an increase in aggregate demand