Multiple Choice
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.
E) gets more excess reserves because of a decrease in the required reserve ratio.
Correct Answer:
Verified
Correct Answer:
Verified
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