1) A commercial banks liabilities consist of Select one: A. the demand deposits it has created....
1) A commercial banks liabilities consist of Select one: A. the demand deposits it has created. B. funds kept to meet key reserve requirements. C. promises to pay made by bank borrowers (IOUs). D. equity capital contributed by the banks shareholders.
2) When an insurance company receives money from policyholders, it can Select one: A. create more money than it takes in. B. lend the money and increase monetary circulation. C. lend only up to 10% of the money it receives. D. merely hold the money it receives, since it cannot make loans.
Homework Answers
1.
Option A is correct.
the demand deposits it has created.
Explanation:
Commercial Banks takes deposits from general public and that is a liability for bank and it has to return the same to the public on it's demand.
2.
Option A is correct.
Create more money than it takes in.
Explanation:
Insurance companies cannot give loans but they can invest in different asset classes to generate returns on the premiums received.
Add Answer to:
1) A commercial banks liabilities consist of Select one: A. the demand deposits it has created....
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Question 1 (1 point) The amount of reserves that a commercial bank is required to hold...
Question 1 (1 point)
The amount of reserves that a commercial bank is required to
hold is equal to:
Question 1 options:
the amount of its checkable deposits.
the sum of its checkable deposits and time deposits.
its checkable deposits multiplied by the reserve
requirement.
its checkable deposits divided by its total assets.
Save
Question 2 (1 point)
Answer the question on the basis of the following information
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Refer to the information and assume that Moolah...
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Question 1 (1 point)
The amount of reserves that a commercial bank is required to
hold is equal to:
Question 1 options:
the amount of its checkable deposits.
the sum of its checkable deposits and time deposits.
its checkable deposits multiplied by the reserve
requirement.
its checkable deposits divided by its total assets.
Save
Question 2 (1 point)
Answer the question on the basis of the following information
for the Moolah Bank.
Refer to the information and assume that Moolah...
Initially, the Republic of Gorgonzola has no commercial banking system. To make trading easier and eliminate the need for barter, the government directs the central bank of Gorgonzola to put into circulation 5 million identical paper notes, called guilders. The central bank prints the guilders and distributes them to the people. At this point the Gorgonzolan money supply is 5 million guilders In order to keep the money safe, some Gorgonzolan entrepreneurs set up a system of commercial banks. When...
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