Use the Following to Answer Questions

question 182

Multiple Choice

Use the following to answer questions:
Charlotte withdraws $8000 from her chequable bank deposit to pay tuition this semester.Assume that the reserve requirement is 20% and that banks do not hold excess reserves.
-(Scenario: Money Supply Changes II) Refer to Scenario: Money Supply Changes II.After the withdrawal,reserves _____,and chequable deposits _____.

• A) increase by $8000;increase by $8000
• B) increase by $1600;decrease by $1600
• C) decrease by $8000;decrease by $8000
• D) decrease by $1600;decrease by $1600

Understand the market implications of stock dividends and stock splits.

Comprehend the concept of total comprehensive income and its components.

Understand the concept of shareholders' equity and its components.

Comprehend the impact of retained earnings restrictions on financial statements.