Statement I: When a businessman repays his bank loan,money is,destroyed.
Statement II: Treasury bills,notes,certificates,and bonds (that will mature in less than a year)are generally considered a bank's secondary reserves.

Question

Quizplus · Accepted Answer

When a loan is repaid, the money that was created when the loan was issued is effectively destroyed, as it is removed from circulation. Treasury bills, notes, certificates, and bonds that mature in less than a year are considered secondary reserves for banks, as they are liquid assets that can be quickly converted to cash.

Statement I: When a Businessman Repays His Bank Loan,money Is,destroyed