A bank's assets are $400 million and its liabilities are $300 million, which means that the bank's net worth (bank capital) is ____________________. If the bank's assets rise by 8% at the same time that its liabilities rise by 5%, the bank's new net worth will then be _______________
A) $700 million; $713 million
B) $100 million; $117 million
C) $100 million; $102 million
D) $350 million; $360.5 million
B
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Ha-eun just received a significant increase in salary. Considering this, her demand for which of the following would most likely increase?
a. discounted produce b. meals in gourmet restaurants c. frozen foods d. meals in fast-food restaurants
If people refused to use banks to create checkable deposits, the banking system would:
A. not be affected in the money creating process. B. not have a way to loan out excess reserves. C. be able to expand the money supply by more than the money multiplier indicates. D. not be able to create new money.
Which of the following is a liability on a bank's balance sheet?
A) checkable deposits B) reserves C) loans D) all of the above E) none of the above
The Fed conducts an open-market sale of Treasury bills of $5 million. If the required reserve ratio is 0.20, what change in the money supply can be expected using the oversimplified money multiplier?
A. $25 million B. $5 million C. 0 D. ?$5 million E. ?$25 million