Answer the following statements true (T) or false (F)
1)Loans made to customers are a liability on a bank's balance sheet.
2) Checkable deposits are a liability on a bank's balance sheet.
3) The supply of money increases when the public buys government securities from commercial
banks.
4) Commercial banks increase the supply of money when they purchase either personal IOUs or
government bonds from businesses and households.
1) F
2) T
3) F
4) T
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Suppose the money wage rate and the price level both fall by 5 percent. As a result
A) the quantity of labor demanded increases. B) the quantity of labor demanded decreases. C) the quantity of labor demanded does not change because there is no change in the real wage. D) people are worse off and there is more unemployment.
For movements along the long-run aggregate supply curve
A) potential GDP is dependent on the price level. B) the prices of goods and services change while the prices of productive resources hold steady. C) the price level and the money wage rate change by the same percentage. D) All of the above are correct.