Suppose a bank lends Henry $1,000 to purchase a car.Which of the following represents the changes in the bank's balance sheet before Henry spends the money?

Question

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When a bank lends money, it records the loan as an asset because it is money the borrower owes to the bank. The bank also increases its liabilities and net worth under chequing deposits because the borrower's account balance increases by the loan amount.

Suppose a Bank Lends Henry $1,000 to Purchase a Car