The balance sheet below represents the current financial, Ask an Expert

Economics

The balance sheet below represents the current financial situation of a commercial bank named Novatia Bank. Suppose that a 15-year-old takes the $150 cash that she received for her birthday and deposits it in her checking account at Novatia Bank.

Balance Sheet

Cash: $650 Stock Shares:$950

Property:$1050 Checkable Deposits: $750

1. What will happen to the bank\'s liabilities after the $150 deposit.

a. The value of stock shares will increase by $150.

b. Deposits increase cash assets, so they do not affect the liabilities side of a bank's balance sheet.

c. The value of checkable deposits will decrease by $150.

d. The value of checkable deposits will increase by $150.

e. The value of stock shares will decrease by $150.

2. What will happen to the bank's assets after the $150 deposit?

a. The value of cash holdings will increase by $150.

b. The value of propery holdings will decrease by $150.

c. Since deposits are a liability, there is no change to the asset side of the bank's balance sheet.

d. The value of propery holdings will increase by $150.

e. The value of cash holdings will decrease by $150.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M92189874

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