When an Individual Deposits Currency into a Checking Account

question 26

Multiple Choice

When an individual deposits currency into a checking account:

• A)bank reserves increase, which allows banks to lend more and increases the money supply.
• B)bank reserves decrease, which reduces the amount banks can lend and reduces the growth of the money supply.
• C)bank reserves are unchanged.
• D)bank liabilities increase, which reduces the amount banks can lend and reduces the growth of the money supply.

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Definitions:

Income Statement

A financial report that shows a company's revenues, expenses, and profits over a specified period.

Compound Leverage Ratio

A measure that assesses the impact of financial leverage on a company's potential returns, taking into account both debt and equity levels.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period of time, revealing profit or loss.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, showing the company's financial position.