When a Bank Makes a Loan by Crediting the Borrower's

question 102

Multiple Choice

When a bank makes a loan by crediting the borrower's checking account balance with an amount equal to the loan:

• A)money is created.
• B)the bank gains new reserves.
• C)the bank immediately loses reserves.
• D)the Fed has made an open-market purchase.

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Definitions:

Operational Assumptions

Preconceived notions or expectations about how daily business operations should proceed or will occur.

Scenario Planning

A strategic planning method that organizations use to visualize and prepare for various future conditions or events.

Qualitative Forecasting

Prediction methods that rely on expert judgments and non-numerical information, often used for making long-term assessments.

Organizational States

Different phases or conditions in which an organization operates, reflecting its growth, stability, or decline.