The structure of a commercial bank's balance sheet
A commercial bank's balance sheet lists everything the bank owns (its assets) and everything it owes (its liabilities). Assets include loans and cash; liabilities include customer deposits.
Formula
Assets = Liabilities + Capital
Real World
Barclays' 2023 balance sheet showed customer deposits of over £500 billion as its largest liability, offset by assets dominated by loans to households and businesses — illustrating how the bank intermediates between savers and borrowers at scale.
Exam Focus
Structure balance sheet answers by stating which side each item sits on and why — examiners penalise candidates who confuse assets and liabilities.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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