You are watching: Which of the following best describes how banks create money?
Suppose you decide to lend money from an virtual peer-to-peer loan site. Top top the T-account because that the lending website for this transaction, the accumulation from the investor who chooses to fund the loan would certainly be classified together ________, and the loan made come you would certainly be classified as ________.
In an attempt to carry lenders and borrowers together following the financial situation of 2008, the federal Reserve make a huge amount of brand-new funds accessible to jae won markets. Any of these brand-new funds that are loaned out by financial institutions would be classified as ________ the the banks.
In an effort to carry lenders and borrowers together adhering to the financial dilemm of 2008, the commonwealth Reserve do a huge amount of new funds accessible to financial markets. The Fed meant this to boost the money supply and also the complete amount of lending since of the multiplier effect, in which a given amount of new reserves results in a multiple boost in
According come the amount theory that money, if the money supply grows at 6%, genuine GDP grows at 2%, and also the velocity of money is constant, climate the inflation price will be
Federal Reserve take away to regulate the money supply and interest prices to go after its macroeconomic plan objectives.
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Using the money demand and money supply model, one open industry purchase that Treasury securities through the federal Reserve would reason the equilibrium interest rate to
If the Fed raises the attention rate, this will ________ inflation and also ________ real GDP in the brief run.
Suppose the Fed to reduce the money supply. In an answer households and also firms will ________ short term assets and this will drive ________ attention rates
decreases investment spending on machinery, equipment, and also factories, intake spending on sturdy goods, and also net exports