Often it is claimed that banks create money by making loans. How can commercial banks create money?

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Often it is claimed that banks create money by making loans. How can commercial banks create money? Is the government the only institution that can legally create money?

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Economics A Contemporary Introduction

ISBN: 9781305505469

11th Edition

Authors: William A. McEachern

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Question Posted: Oct 08, 2023 02:43 AM

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Often it is claimed that banks create money by making loans. How can commercial banks create money?

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The banking system can create money through excess reserves In th...View the full answer

Economics A Contemporary Introduction

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