Describe the basic features of a commercial bank’s balance sheet.
What will be an ideal response?
On the left side of the balance sheet of a commercial bank is a statement of the bank’s assets. On the right side of the balance sheet are the claims of the owners of the bank, called net worth, and claims of the non owners, called liabilities. This relationship would be written in equation form as: assets = liabilities + net worth.
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The above figure shows the market for college education in the United States. With no government intervention, the unregulated market equilibrium is ________ because education generates ________
A) efficient; positive external benefits B) inefficient; positive external benefits C) inefficient; positive external costs D) efficient; positive external costs E) inefficient; public goods
Refer to Table 11-5. Consider the statistics in the table above in describing the industrialized countries. Are these consistent with the economic growth model? Briefly explain
What will be an ideal response?
If the current market federal funds rate equals the target rate and the demand for reserves increases, the likely response in the federal funds market will be:
A. an increase in the market federal funds rate. B. a decrease in the market federal funds rate. C. a market federal funds rate that will equal the target rate. D. nothing; reserve supply is so high that the market federal funds rate will be unchanged.
If the federal budget deficit declines, the national debt
A. will definitely go down. B. may go down. C. will definitely go up. D. may go up.