1. Suppose a new customer opens a checking account and a savings account in a commercial bank, placing $100,000 in each. Later, the bank loans the customer $100,000. For this bank,
Select one: a. assets increased by $200,000 and liabilities increased by $100,000.
b. assets increased by $100,000 because the loan is an asset and liabilities increased by $100,000 because the checking deposit is a liability. The savings deposit is neither an asset nor a liability.
c. liabilities increased by $200,000 since the checking account and the savings account are liabilities while it generated no new assets
d. assets increased by $100,000 because the loan is an asset and liabilities increased by $200,000 because both the checking deposit and the savings deposit are liabilities to the bank.
2. An increase in the interest rate will cause
Select one:
a. the quantity of investment spending to increase.
b. the quantity of investment spending to decrease.
c. the investment function to shift out.
d. the investment function to shift in.
3. The term "financial intermediaries" refers to
Select one:
a. commercial banks only.
b. credit unions only.
c. savings and loan associations only.
d. both commercial banks, credit unions, and trust companies.