Which of the Following Correctly Explains the Deposit Expansion Process

question 23

Multiple Choice

Which of the following correctly explains the deposit expansion process of the banking system?

• A) When a bank loans out its excess reserves, the loan typically ends up being deposited, increasing the total deposits.
• B) When banks receive interest on loans, that extra revenue from interest raises deposits.
• C) Commercial banks are issuers of currency. When they print additional currency, the extra funds eventually are deposited.
• D) If a bank buys additional gold to store in its vault, then it can make additional loans, which end up as deposits.

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Definitions:

Greenwashing

The practice of making misleading claims about the environmental benefits of a product, service, or company to present an eco-friendly image.

Environmentally-Friendly

Refers to products, policies, and practices that have minimal impact on the environment, aiming to conserve resources, reduce pollution, and protect natural habitats.

Polluters

Entities that release pollutants or contaminants into the environment, causing harm to ecosystems and human health.

Carbon Footprint

The total amount of greenhouse gases emitted by an individual, organization, event, or product, usually expressed in equivalent tons of carbon dioxide (CO2).