When a bank pays a check drawn on a customer's account to another bank, the bank loses
A) capital equal to the amount of the check.
B) capital equal to the required reserve ratio times the amount of the check.
C) reserves equal to the amount of the check.
D) reserves equal to the required reserve ratio times the amount of the check.
C
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James has a comparative advantage in the production of corn, while Harry has a comparative advantage in the production of bread. If James and Harry decide to trade with each other, _____
a. both Harry and James will enjoy gains from trade b. only Harry will enjoy gains from trade c. only Harry will suffer losses from trade d. only James will suffer loses from trade e. neither of them will gain from trade
The term federal funds market refers to the market for overnight interbank reserve loans
a. True b. False Indicate whether the statement is true or false
At the federal level, the single most important tax, accounting for slightly less than half of revenue, is the:
A. corporate income tax. B. personal income tax. C. sales tax. D. property tax.
The price elasticity of demand for a vertical demand curve is:
A. perfectly elastic. B. perfectly inelastic. C. unitary elastic. D. elastic.