According to the credit theory of banking: 1.banks create deposits when they make loans 2.banks receive deposits

Fantastic news! We've Found the answer you've been seeking!

Question:

According to the credit theory of banking:

1.banks create deposits when they make loans

2.banks receive deposits and multiply those deposits through the loan creation process

3.Central bank reserves' most important funtion is to meet reserve requirements

4.Banks can become insolvent by not making loans

5.Banks create loans and fund those loans through loans from the central bank

What is answer?

Related Book For answer-question

Income Tax Fundamentals 2013

ISBN: 9781285586618

31st Edition

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

Posted Date: Feb 16, 2024 02:58 AM

See More Questions

The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
Determine whether each relation defines y as a function of x. Give the domain. Identify any linear functions. y = |x|
Use the matrix and initial probability vector in Problem 11 and find the resulting eighth probability vector. 0.5 0.3 0.2 0.3 0.5 0.2 0.1 0.1 0.8
A uniform slender rod AB rests on a frictionless horizontal surface, and a force P of magnitude 2 N is applied at A in a direction perpendicular to the rod. Knowing that the rod has a mass of 3 kg,...
The actual confidence level conf_level does not equal the theoretical confidence level 0.01 in Example 3.2. Explain why. Data from Example 3.2 Data form Figure 3.3 Example 3.2 (Confidence interval...
The section of the sealed joint shown in the figure is loaded by a repeated force P = 6 kip. The members have E = 16 Mpsi. All bolts have been carefully preloaded to Fi = 25 kip each
Explain the trading techniques that can be used with options and financial futures contracts and note how these securities can be used in conjunction with common stock, or bond investments
Recall the following details about the two employees hired in November. a. CPP is deducted at 5.10% (considering $3,500 yearly exemption). b. EI is deducted at 1.62% of gross earnings. c. Both...
Simulating Climate Futures in En-ROADS In this assignment, you will work with the En-ROADS simulation model developed by Climate Interactive and MIT Sloan Sustainability Initiative to create a...
Give expressions for $\Delta u$ and $\Delta h$ that are valid for perfect gases. Do these hold for any process?
For perfect gases, at what temperature do we arbitrarily assign $u=0$ and $h=0$ ?
Give the equations that define enthalpy and entropy.
What is the relation between degrees Fahrenheit and degrees Rankine? And the relation between degrees Celsius and Kelvin?
Why do we need an equation of state? Write down one with which you are familiar.
1. Fill in the Blank.............. "The number of calls by/per product to your "customer complaint hotline" is used as a basis for assigning Customer Service department costs to the product lines."...
Question 6.10 Current and deferred tax worksheets and tax entries From the hip Ltd?s statement of profit or loss for the year ended 30 June 2007 and extracts from its statements of financial position...
Clarita is a single taxpayer with two dependent children, ages 10 and 12. Clarita pays $3,000 in qualified child care expenses during the year. If her adjusted gross income (all from wages) for the...
On September 14, 2012, Jay purchased a passenger automobile that is used 75 percent in his accounting business. The automobile has a basis for depreciation purposes of $35,000, and Jay uses the...
Leslie and Leon Lazo are married and file a joint return for 2012. Leslie's Social Security number is 466-47-3311 and Leon's is 467-74-4451. They live at 143 Snapdragon Drive, Reno, NV 82102. For...
Suppose a job enrichment effort in one plant of a manufacturing firm is judged to be very successful. You are the corporate change agent responsible for the project, and you wish to diffuse it to...
Describe an example of resistance to change that you have observed. Why did it occur?
What qualities would the ideal gatekeeper possess to facilitate the communication of technical information in the firm?

According to the credit theory of banking: 1.banks create deposits when they make loans 2.banks receive deposits

Question:

Expert Answer:

The correct answer according to the credit theory of banking is 1 Banks create deposits when they ma... View the full answer

Income Tax Fundamentals 2013

Students also viewed these economics questions