Which of the Following Statements BEST Explains How Financial Institutions

Multiple Choice

Which of the following statements BEST explains how financial institutions create money?

A) By opening new checking accounts and giving more people access to readily available cash, financial institutions expand the money supply.
B) By issuing money through government contracts, financial institutions expand the money supply.
C) By taking deposits and loaning out these funds, financial institutions expand the money supply.
D) By paying interest on its accounts and investments, financial institutions expand the money supply.
E) By giving interest from its accounts to its clients, financial institutions expand the money supply.