What Effect Does a Bank's Decision to Make Fewer Loans

question 63

Multiple Choice

What effect does a bank's decision to make fewer loans and hold more excess reserves have on a bank's balance sheet?

• A) Assets would decrease; there would be no change to liabilities.
• B) There would be no change to assets; liabilities would decrease.
• C) Assets would increase; there would be no change to liabilities.
• D) There would be no change to assets or liabilities.
• E) Assets and liabilities would both decrease.

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Definitions:

Lipid Profile

A blood test that measures the levels of specific lipids in the blood, used to assess an individual's risk of cardiovascular disease.

Coronary Heart Disease

A condition where the heart's blood vessels, the coronary arteries, are damaged or diseased, often leading to heart attacks.

Obesity

A medical condition characterized by excess body fat that increases the risk of health problems.

Lipid Profile

A blood test that measures the levels of triglycerides, total cholesterol, HDL cholesterol, and LDL cholesterol, providing information about cardiovascular risk.