If We Both Have Chequing Accounts in the Same Chartered

question 128

Multiple Choice

If we both have chequing accounts in the same chartered bank and I write a cheque in your name for $200, the bank's:

• A)balance sheet will be unchanged.
• B)cash reserves and demand deposits will both decline by $200.
• C)liabilities will decline by $200, but its net worth will increase by $200.
• D)assets and liabilities will both decline by $200.

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Definitions:

Utility Schedule

A table or graph that shows the satisfaction or utility a consumer derives from consuming different quantities of a good or service.

Total Utility

The overall satisfaction or enjoyment a person gets from consuming a certain quantity of goods or services.

Marginal Utility

The boost in contentment or usefulness someone achieves from consuming an additional item of a good or service.

Consumer Surplus

The variance between the price consumers intend to pay for a good or service and the price they actually incur.