New money is created in the U.S.economy by
A)increased federal government expenditures.
B)banks that create checkable deposits.
C)the U.S.Treasury.
D)U.S.Department of Mint.
E)the U.S.Congress.

Question

Quizplus · Accepted Answer

Banks create checkable deposits through the process of lending, which in turn increases the money supply in the economy. Increased federal government expenditures and the U.S. Treasury issuing or selling securities can also affect the money supply, but they do not directly create new money. The U.S. Department of Mint is responsible for producing coins, but not creating new money. The U.S. Congress has the power to authorize government spending and taxation, but they do not directly create new money.

New Money Is Created in the U.S.economy by