Which of the Following Statements About Checking Deposits Is True

question 126

Multiple Choice

Which of the following statements about checking deposits is true?

• A)It is a liability for both households and banks.
• B)It is an asset for both households and banks.
• C)It is an asset for households but a liability for a bank.
• D)It is a liability for households but an asset for a bank.

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Definitions:

Less Elastic

Describes demand that is relatively insensitive to price changes, indicating consumers do not reduce purchase quantities significantly when prices increase.

Price Sensitive

Referring to the degree to which the demand for a product changes with a change in its price.

Cost Of Overpricing

The negative impacts, such as reduced sales and loss of market share, that can occur when a product is priced too high.

Cost Of Underpricing

The financial loss incurred by selling a product or service below its market value or cost, often to attract customers or gain market share.