Question

Whenever Australian banks issue liabilities, they attract ESF. (T/F?)

a) True
b) False
c) Sometimes true
d) Cannot be determined

Answer 1

The statement 'Whenever Australian banks issue liabilities, they attract ESF' is False. Australian banks use ESF to settle their financial transactions, not when they issue liabilities.

Step-by-step explanation:

The statement 'Whenever Australian banks issue liabilities, they attract ESF' is False. ESF stands for exchange settlement funds, which are the reserves held by Australian banks at the Reserve Bank of Australia. Australian banks do not attract ESF when they issue liabilities; rather, they use ESF to settle their financial transactions. Therefore, the correct answer is b) False.