When a bank loans out $1,000,the money supply

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When a bank loans out $1,000, it increases the amount of money in circulation, thereby increasing the money supply. This is because the borrower can now spend this money or deposit it into another bank, which creates more deposits and leads to further lending and money creation. Ultimately, the increase in the money supply depends on the reserve requirement and the multiplier effect, but in general, bank loans lead to an increase in the money supply.

When a Bank Loans Out $1,000,the Money Supply