Linda sells her Economics textbook to Ejere for $40. Ejere pays Linda with a check, which she deposits in her checking account in West Bank. Which statement below describes the check-clearing process?
A) Linda's bank gains $40 in checkable deposits and loses $40 in reserves. Ejere's bank gains $40 in reserves and loses $40 in deposits.
B) Linda's bank loses $40 in checkable deposits and gains $40 in reserves. Ejere's bank gains $40 in checkable deposits and loses $10,000 in reserves.
C) Ejere's bank loses $40 in both reserves and checkable deposits. Linda's bank gains $40 in both checkable deposits and reserves.
D) Ejere's bank loses $40 in reserves and gains $10,000 in checkable deposits. Linda's bank loses $40 in both reserves and checkable deposits.
Correct Answer:
Verified
Q84: Use the following to answer questions .
Exhibit:
Q85: Use the following to answer questions .
Exhibit:
Q86: A bank that has no excess reserves
A)
Q87: Use the following to answer questions.
Exhibit: Acme
Q88: Use the following to answer questions .
Exhibit:
Q90: A bank has $100,000 in checkable deposits
Q91: A bank is "loaned up" when
A) legal
Q92: Suppose the required reserve ratio is 10%.
Q93: Use the following to answer questions .
Exhibit:
Q94: Use the following to answer questions .
Exhibit:
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents