Which of the Following Best Describes How Banks Create Money

question 33

Multiple Choice

Which of the following best describes how banks create money?

• A)Banks charge higher interest rates on loans than they pay on deposits.
• B)Banks charge fees for providing financial advice.
• C)Banks create checking account deposits when making loans from excess reserves.
• D)Banks make loans from reserves.

Understand the research methodologies used in developmental psychology, including observational, longitudinal, and experimental approaches.

Recognize the relevance of developmental psychology to addressing social issues and informing social programs.

Understand the factors contributing to the higher dissolution rates of remarriages compared to first marriages.

Analyze how communication in marital relationships varies by age and how it is influenced by socioemotional selectivity theory.

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Definitions:

Premium

An amount paid in excess of the regular price, often associated with insurance costs or the additional cost to buy an asset.

Euro

The official currency of 19 of the 27 European Union countries, which constitutes the Eurozone.

Spot Market

A market in which financial instruments or commodities are traded for immediate delivery and payment, contrasting with futures markets where delivery is set at a future date.

Spot Rate

The current price or rate of a financial instrument or commodity available for immediate settlement or purchase on the open market.