Multiple Choice
A single bank is limited in its ability to create money because
A) loan recipients usually take the proceeds of the loan in cash.
B) the FDIC will not permit it to create money unless the loans are guaranteed by the federal government.
C) the money loaned will probably be deposited in another bank.
D) federal legislation prohibits banks from creating money except to finance international trade.
Correct Answer:
Verified
Correct Answer:
Verified
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