When a Bank Makes a Loan by Crediting the Borrower's

question 107

Multiple Choice

When a bank makes a loan by crediting the borrower's chequing account balance with an amount equal to the loan,

• A) money is created.
• B) the bank gains new reserves.
• C) the bank immediately loses reserves.
• D) money is destroyed.
• E) the Bank of Canada has made an open-market purchasE.

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