The Writing of a $1,000 Check That Is Drawn on Bank

question 315

Multiple Choice

The writing of a $1,000 check that is drawn on Bank A and deposited in Bank B

• A)increases the money supply initially by $1,000.
• B)reduces total reserves of Bank A by $1,000 and increases the total reserves of Bank B by the same amount.
• C)reduces the required reserves of Bank A by $1,000 and increases the required reserves of Bank B by the same amount.
• D)reduces the excess reserves of Bank A by $1,000 and increases the excess reserves of Bank B by the same amount.

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Definitions:

Additional Sums

Extra amounts of money required or due on top of the originally agreed upon or standard payment.

Duress

A situation in which a person performs an act as a result of violence, threat, or other pressure against the person.

Unduly Influenced

When a person is unfairly persuaded by another, often in a manner that compromises their ability to make free and informed decisions.

Fraudulent Misrepresentation

The act of intentionally deceiving another party with false statements or representations that lead to harm or loss.