When a $10 Check Written on the First National Bank

question 138

Multiple Choice

When a $10 check written on the First National Bank of Chicago is deposited in an account at Citibank,then

• A)the liabilities of the First National Bank increase by $10.
• B)the reserves of the First National Bank increase by $ 10.
• C)the liabilities of Citibank increase by $10.
• D)the assets of Citibank fall by $10.

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Definitions:

Foreign Exchange Market

A global marketplace for trading national currencies against one another.

Debt Market

A financial market where participants can issue and trade debt securities, often used by corporations and governments to finance their operations.

Derivatives Market

A market where financial instruments such as futures, options, and swaps are traded, whose value is derived from the value of an underlying asset.

Tertiary Market

A smaller and less accessible segment of the financial market where lesser-known securities are traded.