Do bankers create money?
A)No, they cannot do this as private businesses.
B)No, they are prevented by federal law.
C)Yes, they create money through multiple deposit creation.
D)Yes, they create money by opening checking accounts for customers.

Question

Quizplus · Accepted Answer

Bankers create money through multiple deposit creation, which means that they can lend out a portion of the funds deposited with them, thus increasing the money supply. This process is regulated by the Federal Reserve System, but it is still a practice commonly used by banks. Option A and B are incorrect as they are not true statements about the ability of banks to create money. Option D is also incorrect as opening checking accounts for customers does not necessarily create new money.

Do Bankers Create Money