The process of money creation by the banking system is limited, in part, by the
A)laws passed each year by the U.S. Congress.
B)Comptroller of the Currency.
C)desired reserve ratio.
D)number of banks.
E)number of depositors.

Question

Quizplus · Accepted Answer

The money creation process is limited by the desired reserve ratio, which is the fraction of deposits that banks are required or choose to keep as reserves. This ratio determines how much money banks can lend out, thus affecting the overall money supply.

The Process of Money Creation by the Banking System Is