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Banks Can Impact the Size of the Money Supply Because

Question 56

Multiple Choice

Banks can impact the size of the money supply because:


A) bank loans usually occur, and this increases the money supply.
B) if a bank buys additional gold to store in its vault, it is allowed to make additional loans that count as part of the money supply.
C) banks charge interest on loans and the interest revenue counts as extra money in the money supply.
D) banks issue currency so they can just print additional currency to raise the money supply.

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