When a bank issues a loan to a customer: A) bank assets fall by the amount of the loan. B) the composition of bank assets changes so that bank reserves increase and the value of bank loans decreases. C) bank assets rise by the amount of the loan. D) the composition of bank assets changes so that bank reserves decrease and the value of bank loans increases.
When a bank issues a loan to a customer: A) bank assets fall by the amount of the loan. B) the composition of bank assets changes so that bank reserves increase and the value of bank loans decreases. C) bank assets rise by the amount of the loan. D) the composition of bank assets changes so that bank reserves decrease and the value of bank loans increases.
Chapter12: Money, Banking And The Financial System
Section: Chapter Questions
Problem 12QP
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Question
When a bank issues a loan to a customer: |
|
|
|
A) |
bank assets fall by the amount of the loan. |
|
B) |
the composition of bank assets changes so that bank reserves increase and the value of bank loans decreases. |
|
C) |
bank assets rise by the amount of the loan. |
|
D) |
the composition of bank assets changes so that bank reserves decrease and the value of bank loans increases. |
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