Multiple Choice
A single bank is severely limited in its ability to create money because:
A) the FDIC will not permit it to create money unless the Resolution Trust Corporation guarantees the loans.
B) loan recipients usually take the proceeds of the loan in cash.
C) the funds loaned probably will be deposited in another bank.
D) recent federal legislation prohibits banks from creating money except to finance international trade.
Correct Answer:
Verified
Correct Answer:
Verified
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