The money creation process begins when
A)desired reserves increase because of an increase in deposits.
B)the quantity of money increases.
C)banks have excess reserves.
D)bank deposits increase.
E)banks lend reserves.

Question

Quizplus · Accepted Answer

The money creation process begins when banks have excess reserves, which they can then lend out, creating new deposits and increasing the money supply.

The Money Creation Process Begins When