Question

A commercial bank like Comerica creates money by Group of answer choices making loans. earning profits. printing paper money. selling corporate bonds.

Answer 1

Answer:

The answer is A. by making loans.

Explanation:

Commercial banks don't print paper money(printing paper money is the sole responsibility of Central banks of every country) rather, commercial banks create money by making giving out loans to businesses, individuals or governments.

Money lent out to borrowers is gotten from deposits from customers. it is known that when banks lend out money(an asset to banks) a new deposit must be sourced from through new deposits from customers(a liability to banks)