Table 29-4.
The First Bank of Fairfield
-Refer to Table 29-4. If $800 is deposited into the First Bank of Fairfield, and the bank takes no other actions, its
A)reserves will increase by $100.
B)liabilities will increase by $800.
C)assets will decrease by $800.
D)loans will increase by $800.

Question

Table 29-4.
The First Bank of Fairfield 
-Refer to Table 29-4. If $800 is deposited into the First Bank of Fairfield, and the bank takes no other actions, its
A)reserves will increase by $100. 
B)liabilities will increase by $800. 
C)assets will decrease by $800. 
D)loans will increase by $800.

Quizplus · Accepted Answer

When $800 is deposited into the bank, the bank's liabilities increase by $800 because the bank now owes this amount to the depositor.

Table 29-4. The First Bank of Fairfield