ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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assets
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liabilities
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Either A or B
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None of the above
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Detailed explanation-1: -On a bank’s balance sheet, demand deposits are reported as current liabilities.
Detailed explanation-2: -The depositor can withdraw the money from the bank on demand and earn lower interest than time deposits. The demand depositor is categorized in banks’ books as current liabilities as it has pay to depositor whenever required.
Detailed explanation-3: -It is a liability, because it is money the bank owes to the depositors should they demand their funds back. From the perspective of an individual person or firm holding the checking account, checkable deposits are an asset. Demand deposits: Checking accounts that do not pay interest.
Detailed explanation-4: -Demand deposit account definition A demand deposit account is another term for a checking, savings or money market account. Money in these accounts is highly liquid, and you’ll be able to withdraw funds at any time without paying the bank a penalty.