If the value of bank's loans declines, what is the corresponding reduction in a liability entry that the bank makes?
A) Deposits are reduced by the amount of the decline in the value of the loan.
B) Borrowings are reduced by the amount of the decline in the value of the loan.
C) Net worth is reduced by the amount of the decline in the value of the loan.
D) Cash items in the process of collection are reduced by the amount of the decline in the value of the loan.
C
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The social interest theory of regulation asserts that regulation
A) seeks an efficient use of resources. B) is aimed at keeping prices as low as possible. C) helps firms maximize economic profit. D) of a natural monopoly must be done using rate of return regulation. E) does not work for society as well as would allowing the firms freedom from regulation.
If product Y is an inferior good, a decrease in consumer incomes will
A. shift the demand curve for product Y to the left. B. make buyers want to buy less of product Y. C. shift the demand curve for product Y to the right. D. not affect the sales of product Y.