In our modern financial system, money is created
A) only by central banks.
B) only by the banking system.
C) by central banks and the banking system.
D) only by federal governments.

Question

Quizplus · Accepted Answer

Money in the modern financial system is created both by central banks (through mechanisms like open market operations and lending to financial institutions) and by the banking system (through the process of making loans, which expands the money supply via the fractional reserve banking system).

In Our Modern Financial System, Money Is Created