The Largest Liability on the Balance Sheet of Most Banks

question 94

Multiple Choice

The largest liability on the balance sheet of most banks is their

• A)loans.
• B)holdings of securities.
• C)deposits with the Bank of Canada.
• D)chequing account and savings account deposits of their customers.
• E)vault cash.

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Definitions:

Planned Investment

Future directed expenditure by firms on physical assets like machinery and buildings, anticipated to enhance productivity.

Interest Rates

The cost of borrowing money or the return on savings, typically expressed as a percentage of the principal sum annually.

Money Supply

The sum of all financial resources circulating within an economy at a particular moment, encompassing cash, coins, and the amounts present in checking and savings accounts.

Recessionary Gap

The difference between the actual output of an economy and its potential output at full employment, during a recession.