In Essence, Which of the Following Groups "Creates" Money

question 30

Multiple Choice

In essence, which of the following groups "creates" money?

• A) Banks' loan officers when they grant loans
• B) Consumers when they go shopping
• C) Depositors when they deposit or withdraw money from their banks
• D) Firms when they pay workers their wages and salaries

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Definitions:

Equilibrium Price

The price at which the quantity of goods supplied is equal to the quantity of goods demanded in a market, resulting in no surplus or shortage.

Market Mechanism

Tendency in a free market for price to change until the market clears.

Federal Government

The national government of a federal state, which shares sovereignty with the constituent states or provinces and is typically responsible for national defense, foreign policy, and regulating inter-state commerce.

Equilibrium Price

The market price at which the quantity of a good demanded equals the quantity supplied, leading to market equilibrium.