Suppose a New Customer Opens a Checking Account and a Savings

question 98

Multiple Choice

Suppose a new customer opens a checking account and a savings account in a commercial bank,placing $100,000 in each.Later,the bank loans the customer $100,000.For this bank,

• A)assets increased by $200,000 and liabilities increased by $100,000.
• B)assets increased by $100,000 because the loan is an asset and liabilities increased by $100,000 because the checking deposit is a liability.The savings deposit is neither an asset nor a liability.
• C)liabilities increased by $200,000 since the checking account and the savings account are liabilities while it generated no new assets.
• D)assets increased by $100,000 because the loan is an asset and liabilities increased by $200,000 because both the checking deposit and the savings deposit are liabilities to the bank.

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Definitions:

Jackson

Refers to Andrew Jackson, the seventh President of the United States, known for his populist approach and policies, including the Indian Removal Act.

Marshall

Refers to George C. Marshall, an American military leader, Chief of Staff of the Army, Secretary of State, and the third Secretary of Defense, known for his leadership during World War II and the European Recovery Program (Marshall Plan).

Taney

Roger B. Taney, the fifth Chief Justice of the United States, best known for delivering the majority opinion in the Dred Scott v. Sandford case, which declared that African Americans could not be American citizens and negated the Missouri Compromise.

American Global Economic System

The international economic influence and policies of the United States, including trade practices, investment flows, and the promotion of free market principles.