Hmwk 5 MC questions

Hmwk 5 MC questions - Homework 5 - Multiple Choice...

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- Multiple Choice Questions EC370 W09 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following statements is false? 1) _______ A) A bank's assets are its uses of funds. B) Bank capital is recorded as an asset on the bank balance sheet. C) The bank's assets provide the bank with income. D) A bank issues liabilities to acquire funds. 2) Which of the following are reported as liabilities on a bank's balance sheet? 2) _______ A) Deposits with other banks B) Loans C) Reserves D) Checkable deposits 3) Because checking accounts are ________ liquid for the depositor than passbook savings, they earn ________ interest rates. 3) _______ A) more; lower B) less; higher C) less; lower D) more; higher 4) The fraction of checkable deposits that banks are required by regulation to hold are 4) _______ A) excess reserves. B) total reserves. C) required reserves. D) vault cash. 5) Bank's make their profits primarily by issuing ________. 5) _______ A) loans B) NOW accounts C) negotiable CDs D) equity 6) When $1 million is deposited at a bank, the required reserve ratio is 20 percent, and the bank chooses not to hold any excess reserves but makes loans instead, then, in the bank's final balance sheet, 6) _______ A) reserves increase by $160,000. B) the assets at the bank increase by $800,000. C) the liabilities of the bank increase by $800,000. D) the liabilities of the bank increase by $1,000,000. 7) When a $10 check written on the First National Bank of Chicago is deposited in an account at Citibank, then 7) _______ A) the liabilities of the First National Bank decrease by $10. B) the liabilities of Citibank decrease by $10. C) the reserves of the First National Bank increase by $10. D) the assets of Citibank decrease by $10. 8) Asset transformation can be described as 8) _______ A) borrowing short and lending long. B)
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Hmwk 5 MC questions - Homework 5 - Multiple Choice...

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