Commercial banks increase the supply of money when they purchase either personal IOUs or government bonds
from businesses and households.

Name: Commercial banks increase the supply of money when they purchase either personal IOUs or government bonds from businesses and households.
Brand: Quizplus
Rating: 4.9 (57 reviews)

Question

Quizplus · Accepted Answer

When commercial banks purchase personal IOUs or government bonds, they add to their assets and liabilities, increasing the supply of money in circulation.

Commercial Banks Increase the Supply of Money When They Purchase