What Is the Immediate Effect When Bank a Lends $1

question 111

Multiple Choice

What is the immediate effect when Bank A lends $1, 000 to a local business?

• A)The money supply increases by $1, 000
• B)The money supply decreases by $1, 000
• C)Bank A's liability increases by $1, 000
• D)Bank A's excess reserves increase by $1, 000
• E)Bank A's demand deposits decrease by $1, 000

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Definitions:

Cost Conscious

The mindset of being aware of costs and striving to minimize expenses without sacrificing quality or value.

Volume Conscious

Awareness and focus on producing or handling large quantities of goods or services to leverage economies of scale or meet high demand.

Vertical Coordination

It refers to the process of managing and integrating processes, functions, and activities across different levels within an organization to ensure alignment and efficiency towards a common goal.

Delegation

Delegation is the process of distributing and entrusting work to other persons.