If bank with leverage of 8 to 1 increases its assets by adding $1 to capital for every $1 added to assets:
A. leverage decreases.
B. leverage increases.
C. the answer cannot be determined from the information in the question.
D. leverage stays constant.
Answer: A
You might also like to view...
Where are the final goods and services produced that are included in Germany's GDP?
A) anywhere, as long as they are produced using German labor B) within Germany C) within Germany but only if they are produced using only German resources D) outside of Germany E) anywhere, as long as they are produced using German resources
The double coincidence of wants is that each party to an exchange must want precisely what the other has to offer
Indicate whether the statement is true or false
The most-favored-nation clause was created in the
a. Trade Expansion Act of 1962. b. Marshall Plan. c. Reciprocal Trade Agreements Act of 1934. d. Canadian-American Trade Act.
In a fractional-reserve banking system, a decrease in reserve requirements
a. increases both the money multiplier and the money supply. b. decreases both the money multiplier and the money supply. c. increases the money multiplier, but decreases the money supply. d. decreases the money multiplier, but increases the money supply.