A customer repays an outstanding loan to their commercial bank using funds held in their current (deposit) account. All other things being equal, which combination of events shows the immediate effect of this transaction?
| Bank's liabilities | Bank's assets | Money supply | |
|---|---|---|---|
| A | Increase | Increase | Increases |
| B | Fall | Increase | Falls |
| C | Fall | Fall | Falls |
| D | Increase | Fall | Increases |
A
B
C
D
176 exam-style questions on AQA A Level Economics 2.4 Financial markets and monetary policy (A-level only), covering 2.4.1 The structure of financial markets and financial assets, 2.4.2 Commercial banks and investment banks, 2.4.3 Central banks and monetary policy, and 2.4.4 The regulation of the financial system. Each one has a worked solution and a mark scheme showing where the marks go.