All Union Bank pays $120,000 from its reserves to buy the corporate bonds of a leading real estate firm from Smith and Kim Bank. Smith and Kim Bank keeps the amount in its vault as reserves. In the given scenario, which of the following statements is true?
a. $120,000 will be added as an asset for Smith and Kim Bank, while $120,000 will be added as a liability for All Union Bank.
b. $120,000
will be added as a liability for Smith and Kim Bank, while $120,000 will be added as an asset for All Union Bank.
c. The liabilities of both Smith and Kim Bank and All Union Bank will increase by $120,000.
d. There will be no change in the value of assets or liabilities of both the banks.
d
You might also like to view...
In the figure above, originally the apartment rental market is in short-run and long-run equilibrium with a rent of $600 per month. Then the government imposes a rent ceiling of $500 per month. The loss of producer surplus
A) is smaller than the gain in consumer surplus. B) is larger than the gain in consumer surplus. C) is the same size as the gain in consumer surplus. D) could be smaller than, larger than, or the same size as the gain in consumer surplus.
An action that an individual takes in one period to try to control her behavior in a future period is called
A. a maximin strategy. B. a commitment device. C. behavioral conditioning. D. Pavlovian behavior.
Which of the following is(are) the main factor(s) spurring economic growth?
A. Improving technology. B. More and better capital. C. More and better labor. D. All of these cause economic growth.
Unlike social insurance taxes, income taxes are paid on wages only
Indicate whether the statement is true or false