Banks in the United States may create new money equal to their amount of required reserves.

Name: Banks in the United States may create new money equal to their amount of required reserves.
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Question

Quizplus · Accepted Answer

Banks in the United States can create new money through lending, but the amount they can lend is determined by their excess reserves, not their required reserves. Required reserves are the minimum reserves a bank must hold and cannot be used for lending.

Banks in the United States May Create New Money Equal