Asked by hannah mazzeo on May 02, 2024
Verified
If a bank receives $1,000 in currency as a new deposit,its ability to make loans increases by $1,000.
Ability
Ability refers to the capacity or power of an individual or entity to do something effectively, often implying a skill or competence in a specific domain.
Currency
A system of money in general use in a specific country or region.
Loans
Financial agreements wherein a lender gives money or assets to a borrower, and the borrower agrees to return the property or repay the borrowed money, usually along with interest, at a future point in time.
- Comprehend the function of banks within the money creation process.
- Acquire knowledge about the expansion or contraction of the monetary supply.
Verified Answer
Learning Objectives
- Comprehend the function of banks within the money creation process.
- Acquire knowledge about the expansion or contraction of the monetary supply.
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