How Do Banks Create New Deposits

question 66

Multiple Choice

How do banks create new deposits?  

• A) by lending out excess reserves 
• B) by lending out desired reserves 
• C) by raising interest rates on loans 
• D) by calling in loans

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Definitions:

Receptive Vocabularies

The words a person can understand and recognize, even if they cannot actively use them in speech or writing.

Productive Vocabularies

The set of words an individual can actively use in speech or writing, as opposed to passive vocabulary recognized in others' communications.

Speech Sounds

The distinct units of sound, such as phonemes, that are used in a language to convey meaning.

Phonemes

Minimal sound units in a language that serve to distinguish words from each other.