If a Bank Borrows $1,000 from the Fed and Lends

question 117

True/False

If a bank borrows $1,000 from the Fed and lends it out,the bank sets in motion a process that will result in an expansion of the money supply by a multiple of that $1,000.

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Definitions:

Marketer

A person or company responsible for promoting and selling products or services, including market research and advertising.

Dividend Ratio

A financial ratio that shows how much a company pays out in dividends each year relative to its share price.

Financial Ratio

A numerical comparison derived from a company's financial statements that investors use to analyze a company's performance.

Shareholders

Individuals, companies, or institutions that own at least one share of a company's stock, and as a result, potentially benefit from its success in the form of dividends and/or capital gains.