When an Individual Withdraws Funds from a Checking Account The

question 56

Multiple Choice

When an individual withdraws funds from a checking account the:

• A)Bank's balance sheet shrinks but the size of the Fed's balance sheet is not affected
• B)Bank's balance sheet shrinks and so does the Fed's balance sheet
• C)Bank's balance sheet shrinks but the size of the Fed's balance sheet increases
• D)Size of the bank's balance sheet stays the same but the size of the Fed's balance sheet shrinks

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Definitions:

Revolving Line of Credit

A credit facility extended by a financial institution to a client that allows the borrower to draw, repay, and redraw loans advanced to them up to a specified maximum amount.

Annual Sales

Annual sales is the total amount of sales or revenue a company generates in a fiscal year.

Retailer

A retailer is a business or person that sells goods directly to consumers for personal or household consumption.

Short-Term Financing Policies

Strategies a company uses to manage its immediate or short-term financial needs and operational expenses.