If a Bank Increases the Amount of Cash It Has

question 98

Multiple Choice

If a bank increases the amount of cash it has in its vault,how would this affect the bank's balance sheet?

• A) Reserves would increase, liabilities would stay the same, and owner's equity would increase.
• B) Reserves would decrease, liabilities would stay the same, and owner's equity would increase.
• C) Reserves would increase, liabilities would decrease, and owner's equity would decrease.
• D) Reserves would increase, liabilities would stay the same, and owner's equity would decrease.
• E) Reserves would decrease, liabilities would increase, and owner's equity would decrease.

---

Definitions:

Counter-Arguments

Arguments or reasoning put forward to oppose an idea or theory developed in another argument.

Imagery

The use of vivid or figurative language to represent objects, actions, or ideas, often used in literature and psychology to shape perceptions.

Nonprogrammed Decisions

Decisions made in response to situations that are unique, not well-defined and lack pre-established processes.

Sequential

Relating to or forming a sequence, where things follow a logical order or a fixed series.