Bank 1 loans $20,000 to a customer. The customer takes the $20,000 and buys a car. When the loan is made, how is the bank’s t-account (balance sheet) affected?

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Bank 1 loans $20,000 to a customer. The customer takes the $20,000 and buys a car. When the loan is made, how is the bank’s t-account (balance sheet) affected?

(A)LOANS DECREASE AND DEPOSITS INCREASE

(B) LOANS INCREASE AND RESERVES DECREASE

(C) LOANS INCREASE AND DEPOSITS INCREASE

(D) LOANS DECREASE AND RESERVES INCREASE

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Bank 1 loans $20,000 to a customer. The customer takes the $20,000 and buys a car. When the loan is made, how is the bank’s t-account (balance sheet) affected?
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