New Loans Create Money Directly, but They Also Create Excess

question 227

True/False

New loans create money directly, but they also create excess reserves in other banks, which leads to still further increases in both loans and the supply of money.

---

Definitions:

Schizophrenia

A chronic and severe mental disorder that affects a person's thinking, feeling, and behavior, making it hard for them to distinguish between reality and their own thoughts.

Psychiatric Hospital

A medical facility specializing in the care and treatment of individuals with mental health disorders.

Word Salad

A confused or unintelligible mixture of seemingly random words and phrases, typically associated with severe mental illness.

Schizophrenia

A severe mental disorder characterized by disruptions in thought processes, perceptions, emotional responsiveness, and social interactions.