Question

True or False: 1- A savings account is a claim against a bank. 2- The discount...

True or False:

1- A savings account is a claim against a bank.

2- The discount window is when Sodalicous sells drinks at half price through the drive through.

3- A liquidity trap occurs when consumer's spending exceed their incomes and they have little or no liquidity.

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Answer #1

1. The given statement is TRUE because a saving account is always a claim against bank and it is to be paid by the bank.

2. The given statement is FALSE because discounting window is not about sodalicious selling drinks at half price,it is about Federal Reserve providing loans to the commercial bank.

3. Given statement is TRUE because liquidity trap will happen when there is not enough amount of cash which are available to the company to repay fixed repayment schedule of debt.

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