Banks Create Money by

question 120

Multiple Choice

Banks create money by

• A)printing paper money.
• B)minting coins.
• C)making loans.
• D)buying government securities.
• E)None of the above because banks cannot create money;only the Federal Reserve can create money.

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Definitions:

Capital Budget

A Capital Budget involves the planning and allocation of funds for long-term investments and infrastructure projects.

Two-Thirds Majority Vote

A voting requirement where at least two-thirds of the members present must agree for a proposal to pass, often used for significant decisions.

Transfer Payments

Payments made by the government to individuals for which no goods or services are provided in return, such as welfare benefits.

Budget Deficit

The situation where a government's expenditures surpass its revenue over a specific period, leading to borrowing or debt accumulation.