The correct answer is C) making loans while only keeping a fraction of deposits in cash on hand at any given time.
Commercial Banks create money by making loans while only keeping a fraction of deposits in cash on hand at any given time.
In the United States, the Federal Reserve is the central bank and has an important role in regulating the function of commercial banks in America.
The Federal Reserve’s role is to promote economic growth and stability by enacting monetary policy.
The Federal Reserve Act of 1913 established the Federal Reserve system to avoid consumer panic, as had happened in the past.
The Federal Reserve plays a key role in helping control inflation because it keeps the money supply stable in order to maintain low inflation.
The Fed is the central bank in the United States. Its role in the US economy is very important to maintain a healthy financial and monetary system. The monetary policy of the Fed allows the control and the supply of money to maintain the stability of the economy. This control is very important in order to maintain proper levels of inflation so prices do not increase.
