6. Commercial banks in the United States create money by:?

Question

A. Selling bonds

B. Replacing worn-out currency

C. Issuing loans

D. Printing new currency

E. Converting checking accounts to savings accounts

Answer 1

c.

Answer 2

c.

If you deposit $1000 in the bank today, tomorrow the bank will show that you have a balance of $1000. If they lend some guy $900 dollars the next day, then you will still have $1000 in your account, and HE will have $900 to spend (and pay back with interest.) So the bank has "created" $900, and $1000 has turned into $1900.

["A" does NOT create money; it actually sucks money out of the money supply as a person with $500 in cash will buy a bond and have NO cash, afterwards.]

Answer 3

The economic situation cannot be blamed on one party, but both. It has to be. One half of Congress can't do something without the say of the other half of Congress. People just know that there's a better way to try and eliminate the economic crisis than spending TRILLIONS of dollars.

Answer 4

C and getting interest

Answer 5

C.

Answer 6

"A" & "C".