The majority of money is created when
A) new bills are printed
B) new coins are minted
C) the Fed sells bonds
D) banks make loans

Question

Quizplus · Accepted Answer

The majority of money is created through the process of fractional reserve banking, where banks are allowed to lend out a portion of the deposits they receive. This means that when a bank makes a loan, new money is effectively created and added to the overall money supply. Therefore, banks making loans is the best choice for how the majority of money is created.

The Majority of Money Is Created When