Why Do Banks Create Money? Do They Create Money to Help

question 82

Essay

Why do banks create money? Do they create money to help the Federal Reserve control the money supply or is there a more basic reason?

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Definitions:

Reflective Communication

An interactive communication process in which the receiver uses verbal “mirroring” to restate what the sender has said for optimal clarification by all parties.

Verbal "Mirror"

A communication technique where a speaker repeats or paraphrases what another person has said to confirm understanding or empathy.

Sterile Techniques

Methods employed to maintain sterility during medical procedures, including the use of sterilized instruments and gloves to prevent infection.