If Matt Taylor Gets His $800 Loan from the Paris

question 21

Multiple Choice

If Matt Taylor gets his $800 loan from the Paris First National Bank in cash rather than in the form of a new checkable deposit, the:

• A) Paris First National Bank will get $800 in new reserves.
• B) Paris First National Bank will not get $800 in new reserves.
• C) assets of the Paris First National Bank will increase by $800.
• D) assets of the Paris First National Bank will decease by $88.

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Definitions:

Market Value

The current market valuation at which you can buy or sell a service or asset.

List Price

The advertised or published price of a product or service before any discounts, allowances, or rebates are applied.

Deferred Payment Contract

A contractual agreement where payment is postponed to a future date beyond the standard billing period.

Prime Interest Rate

The interest rate that commercial banks charge their most credit-worthy customers, often used as a benchmark in lending rates.