Which of the Following Statements Best Explains How Financial Institutions

question 24

Multiple Choice

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

• A) By opening new chequing 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 collecting interest on its accounts through investments, financial institutions expand the money supply.
• E) By giving interest from its accounts to its clients, financial institutions expand the money supply.

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