Tom Decides to Withdraw $300 Out of His Checking Account

question 11

Multiple Choice

Tom decides to withdraw $300 out of his checking account. The impact of this transaction on the Fed's balance sheet will be:

• A) no change in total assets or total liabilities, but an increase in the liability of currency and a decrease in the liability of reserves by $300 respectively.
• B) no change in total assets but the liability of currency increases by $300.
• C) total assets decrease by $300 and the liability of currency increases by $300.
• D) no change in either total assets or total liabilities.

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Definitions:

Slip-On Shoe

A type of shoe that does not require lacing or fastening, designed to be easily slipped on and off the foot.

Market

The arena in which commercial dealings are conducted, often referring to the supply and demand for goods and services.

Business Structure

The legal and organizational framework chosen for a company, affecting liability, taxes, and management strategy.

Potential Customers

Individuals or organizations that might have an interest or need in a company's offerings but have not yet concluded a purchase transaction.