Deposit Creation Occurs When

question 68

Multiple Choice

Deposit creation occurs when:

• A) A person puts cash in a bank and the bank holds all of it as reserves.
• B) Someone deposits a payroll check into a transactions account at a bank.
• C) Money enters the banking system and a portion of it is lent out.
• D) A bank borrows reserves from the Federal Reserve.

---

Definitions:

Simple Interest Rate

The interest rate applied to the principal amount only, without compounding over a period.

Failed To Make

Refers to the inability or omission of completing a particular action, such as making a payment or fulfilling an obligation.

Equal Payments

Equal payments entail a financial agreement where payments or installments remain consistent over a specified period.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, commonly expressed as an annual percentage of the loan outstanding.