In terms of volume or dollar amount, most of the money in our economy is created by:
A)the receipt of gold bullion through international trade and finance.
B)chartered banks and the Bank of Canada.
C)the Royal Canadian mint.
D)the Department of Finance.

Question

Quizplus · Accepted Answer

Chartered banks and the Bank of Canada are responsible for creating the majority of money in the Canadian economy through the process of fractional reserve banking, where they can lend out more money than they actually have in reserves. The Royal Canadian Mint is responsible for producing physical currency and coins, but this makes up a small portion of the overall money supply. The Department of Finance deals with government spending and revenue, but does not directly create money. International trade and finance may affect the economy, but it does not create money in and of itself.

In Terms of Volume or Dollar Amount, Most of the Money