Suppose you withdraw $1,000 in cash from your checking account. Draw a T-account to show the effect of this transaction on your bank's balance sheet
What will be an ideal response?
The withdrawal of $1,000 from your checking account will reduce the bank's checking account deposits and reserves by $1,000.
Assets Liabilities
Reserves -$1,000 Deposits -$1,000
You might also like to view...
What determines the real exchange rate and the nominal exchange rate in the long run?
What will be an ideal response?
Which of the following statements is false?
A. As the price paid for a bond rises, the yield declines. B. If you purchase stock from an individual that currently owns the stock, you are buying it in the secondary market. C. The yield on a bond is another term for the coupon rate on a bond. D. A rating of Aaa from Moody's is the highest bond rating given by that rating agency.
If both the marginal cost and the average variable cost curves are U-shaped. At the minimum point on the average variable cost curve, the marginal cost must be:
a. greater than the average variable cost. b. less than the average variable cost. c. equal to the average variable cost. d. at its minimum.
The demand for microwaves in a certain country is given by: D = 8,000 - 30P, where P is the price of a microwave. Supply by domestic microwave producers is: S = 4,000 + 10P. If this economy opens to trade while the world price of a microwave is $50, and the government imposes a tariff of $30 per microwave, then the domestic quantity supplied will be ________ microwaves.
A. 4,800 B. 5,000 C. 4,000 D. 4,500