The process of money creation by the banking system is limited,in part,by the
A)number of banks.
B)desired reserve ratio.
C)number of depositors.
D)Comptroller of the Currency.
E)laws passed each year by the U.S.Congress.

Question

Quizplus · Accepted Answer

The desired reserve ratio, set by the Federal Reserve, determines how much money banks must hold in reserve and how much they can lend out, thereby limiting the amount of money that can be created by the banking system. The other options listed do not have a direct impact on the process of money creation by the banking system.

The Process of Money Creation by the Banking System Is