An essential function for a bank is to

Question

Quizplus · Accepted Answer

Creating money through lending is a key function of banks, as they take in deposits and then use those deposits (as well as money borrowed from other sources) to make loans to borrowers. This process generates interest income for the bank and expands the overall money supply in the economy. Maximizing assets, lending all deposits, and minimizing reserve ratios may all be important goals for a bank, but they are not as essential to the core function of creating and managing the money supply.

An Essential Function for a Bank Is to