Table 16-3. -Refer to Table 16-3. If $1,000 Is Deposited into the Deposited

question 320

Multiple Choice

Table 16-3.
-Refer to Table 16-3. If $1,000 is deposited into the First Bank of Fairfield, and the bank takes no other actions, its

• A)reserves will increase by $200.
• B)liabilities will decrease by $1,000.
• C)assets will increase by $1,000.
• D)reserves will increase by $800.

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Definitions:

Fixed Resource

A resource or asset in production whose quantity cannot easily be increased or decreased in the short term.

Short Run

in economics, refers to a period during which at least one input, such as plant size, is fixed and cannot be changed.

Long Run

A period of time in economics where all factors of production and costs are variable, allowing for complete adjustment to changes in market conditions.

Fixed Resource

An asset or input whose quantity cannot be altered in the short run for the production of goods and services.