A bank creates money when it: a. gets new checkable deposits which the depositor formerly held as cash. b. gets more excess rese
rves because of a decrease in the required reserve ratio. c. makes a loan from its excess reserves. d. has a loan paid off, which creates excess reserves for the bank. e. holds back excess reserves because of an increase in the required reserve ratio.
<h2>C. Makes a loan from its excess reserve ratio. </h2>
Explanation:
Money is created by the government when it decides to print it but banks can also create money, but they do not print it. When a dollar is deposited in the bank account its total reserve increases. It keeps some of the required reserves and loans the excess reserves out. And this “ Loan” increases the money supply. This is how money is created by the bank and it increases the money supply. Maximum change in the money supply can be predicted by the money supplier.
The main purpose of the passage is to explore reasons why a definition is ambiguous.
<u>Explanation:</u>
Not all definitions that come forward of a discipline can be considered as standard. Some definitions are inspired by personal knowledge and experiences related to the discipline.
Before accepting any definition as standard, the extent of ambiguity about the authenticity of the definition needs to be determined. This passage given above speaks about the same.
While they are sometimes used interchangeably, they are different: ethics refer to rules provided by an external source, e.g., codes of conduct in workplaces or principles in religions. Morals refer to an individual's own principles regarding right and wrong. ... The legal duty involves a corresponding right.