When a Bank Accepts a Checkable Deposit from a Customer

question 107

Multiple Choice

When a bank accepts a checkable deposit from a customer, its deposits will increase and its excess reserves will:

• A) Increase by the same amount as deposits
• B) Increase by less than the deposits
• C) Increase by more than the deposits
• D) Decrease

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Definitions:

Real GDP

An economic metric that quantifies the value of all finished goods and services produced within a country's borders in a specific time period, corrected for changes in price or inflation.

Money Supply

The complete financial resource pool available in an economy at a particular period.

Central Banks

Central banks are national financial institutions that manage a country's currency, money supply, and interest rates, overseeing its monetary policy.

Money Supplies

The overall financial assets tally in an economy at a given point.