1- Determine the net effect of the following transactions: Customer withdraws $1

Question

1-

Determine the net effect of the following transactions:

Customer withdraws $1000 from checking

Customer deposits $500 into savings

Customer buys $750 CD

A- Assets increase by $250

B- Liabilities increase by $250

C-Reserves increase by $250

D- All of the above

2-

Determine the net effect of the following transactions:

Customer deposits $500 into checking

Bank borrows $1000 from Fed

Banks sells $500 in bonds to the fed

A- Reserves increase by $1500

B- Reserves increase by $2000

C- Assets increase by $1500

D- Assets increase by $2000

E- A & C

F- B & D

G- B & C

3-

Determine the net change in liabilities based on the following transactions:

Customer withdraws $293

Customer deposits $199

Bank borrows $61 from Fed

Explanation / Answer

B- Liabilities increase by $250

E- A & C

Customer deposits $199

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