Explain liabilities and assets as they relate to a bank's balance sheet
What will be an ideal response?
Liabilities are the source of funds for a bank. Included in a bank's liabilities are deposits in the bank and owner's equity. Assets are the uses of the funds of a bank. Assets generate income for a bank. A bank's assets include its loans and reserves.
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A firm should shut down in the short run if the price is less than the:
A) average fixed cost. B) average total cost. C) average variable cost. D) marginal cost.
Refer to the supply and demand graph below. In the graph, line S is the current supply of this product, while line S1 is the optimal supply from the society's perspective. One solution to this externality problem is to:
A. Give consumers a subsidy of the amount FG per unit
B. Give producers a subsidy of the amount AB per unit
C. Tax producers by the amount DE per unit
D. Tax consumers by the amount EF per unit