A bank creates money when it:
A. gets new checkable deposits which the depositor formerly held as cash.
B. has a loan paid off, which creates excess reserves for the bank.
C. makes a loan from its excess reserves.
D. holds back excess reserves because of an increase in the required reserve ratio.
Answer: C
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Increased foreign direct investment in India has contributed to its recent economic growth
Indicate whether the statement is true or false
Capacity utilization increases. What is the impact on aggregate expenditures and income?
A) Both increase. B) Both decrease. C) Aggregate expenditure increases and income decreases. D) Aggregate expenditure decreases and income increases.
Monitoring the performance of the people managing the firm is easiest in the case of
A) proprietorships. B) partnerships. C) corporations. D) S corporations.
Which of the following statements is true?
a. Economic theory does not make unrealistic assumptions. b. Economists should not ignore details while focusing on complex problems. c. Abstraction forms an important part of economic analysis. d. The word theory means same for both economists and laymen.