Multiple Choice
Which of the following statements is FALSE?
A) When a bank makes a loan and the loan is spent, the lending bank can lose reserves.
B) Loans made by financial depository institutions increase the size of the money supply.
C) Financial institutions, such as commercial banks, take money from depositors to give to borrowers when making a loan.
D) If a bank lends more than the amount of its excess reserves, it will not meet its reserve requirement when the loans clear.
Correct Answer:
Verified
Correct Answer:
Verified
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