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Flauer [41]
1 year ago
12

How do banks create money? banks create money by ______. a. printing more $20 bills b. making loans c. sending out credit cards

to depositors d. increasing the desired reserve ratio
Business
1 answer:
Anestetic [448]1 year ago
3 0

Banks create cash by using lending extra reserves to buyers and businesses. This, in turn, finally provides greater to money in circulation as dollars are deposited and loaned again.

The Fed does not really print money. This is treated through the Treasury Department's Bureau of Engraving and Printing.

<h3>How is money created in the economy?</h3>

Most of the money in our economy is created by using banks, in the form of financial institution deposits – the numbers that show up in your account. Banks create new money each time they make loans. 97% of the money in the financial system today exists as financial institution deposits, at the same time as simply 3% is physical cash.

<h3>How do commercial banks create money?</h3>

Commercial banks make cash through imparting and earning activity from loans such as mortgages, auto loans, business loans, and personal loans. Customer deposits provide banks with the capital to make these loans.

Learn more about creating money here:

<h3>brainly.com/question/3625390</h3><h3 /><h3>#SPJ4</h3>
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Suppose you wanted to closely examine the leaf of a plant. which type of lens would you use? explain
tekilochka [14]
<span>To examine the leaf of a plant, one should use a magnifying glass which holds a convex lens. A convex lens allows parallel light rays to pass through then refracts the rays so they meet on one principal point. This type of lens is useful in seeing something small.</span>
3 0
3 years ago
According to the quantity theory of money, a 5 percent increase in money growth increases inflation by ___ percent. According to
lina2011 [118]

Answer:

both blanks can be filled by <u>5%</u>

Explanation:

The quantity theory of money states that there is a proportional relationship between the money supply and the general level of prices. An increase in the money supply will increase the general level of prices in the same proportion (called inflation).

The Fisher equation measures the relationship between nominal and real interest rates. Real interest rate = nominal interest rate - inflation rate.

So if inflation increases, the nominal inflation rate will increase to keep the real interest rate the same.

8 0
3 years ago
Shelby Corporation was organized in January to operate an air-conditioning sales and service business The charter issued by the
Vedmedyk [2.9K]

Answer: Please refer to Explanation

Explanation:

This is how the stockholders' equity section of the balance sheet at December 31 should look like,

STOCKHOLDERS'S EQUITY

Contributed Capital

Common Stock (29000 shares x $ 1 par) $29,000

Preferred Stock (19500 shares x $ 10 par) $195,000

Paid in Capital in excess of Common Stock at par ($841000 - $29000) $812,000

Paid in Capital in excess of Preferred Stock at par (19500 shares x ($39 - $10)) $565,500

Total Contributed Capital (sum of all of the above) $1,601,500

Retained Earnings ( $59,000 - $10,000) $49,000

Total Stockholder's Equity (Retained Earnings to contributed cap) $1,650,500

If you need any clarification do comment.

8 0
2 years ago
The significance of the bill of lading in overseas shipments is to provide which of the following?
nignag [31]

Answer:

D. Evidence of title transfer of goods to customers.

Explanation:

The bill of lading is a legally binding document that provides the carrier and shipper with all of the necessary details to accurately process a shipment. It has three main functions. (1) it is a document of title to the goods described in the bill of lading. (2) it is a receipt for the shipped products. (3) the bill of lading represents the agreed terms and conditions for the transportation of the goods.

5 0
3 years ago
Lee lives in a nation that has a worldview that values subordination of the individual to the goals of the group. Lee's country
Nikitich [7]

Lee lives in a nation that has a worldview that values subordination of the individual to the goals of the group. Lee's country also follows the principle that people should be judged by their contribution to the group. Lee's country is collectivism.

<h3><u>Explanation:</u></h3>

The principle that gives importance and priority to the group rather than the individuals is called as collectivism. It gives importance to the group for instance a family rather an individual in that family. For instance consider the activity of a child who has been brought up in a collectivist society.

He will have the tendency to take care of the parents who are older and when they are not feeling well instead of taking care of themselves. In the given example, the country in which LEE lives is giving priority to the group and thus Lee's country is collectivism.

6 0
3 years ago
Read 2 more answers
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