A Customer of Bank a Writes a $20,000 Check for a New

question 39

Multiple Choice

A customer of Bank A writes a $20,000 check for a new car, which the car dealer deposits in his bank, Bank B. Which of the following statements pertaining to this transaction is most true?

• A) Banks A's reserves will decrease by the required reserve rate times $20,000 and Banks B's reserves will increase by (1- required reserve rate) times $20,000
• B) Bank A's reserves decrease by $20,000 and Bank B's reserves increase by $20,000
• C) Neither Bank A's nor B's reserves will change
• D) Bank B's reserves will decrease and Bank A's reserves will increase by $20,000

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Definitions:

Right Cerebral Hemisphere

The right half of the brain, often associated with spatial abilities, facial recognition, and processing of music and art.

Mirror

A reflective surface, typically glass coated with a metal amalgam, that reflects a clear image.

Recognize Themselves

The ability of an individual to identify and acknowledge their own reflection or representation as their own.

Wernicke's Area

A region of the brain important for language comprehension, located in the posterior part of the temporal lobe on the left hemisphere in most people.