What term describes a system where financial institutions can increase the money supply by lending out funds deposited with them, thereby facilitating economic activity and growth through credit creation?
a) Fractional reserve banking
b) Monetary expansion mechanism
c) Credit multiplier system
d) Loan multiplication model

Question

15-07-2024
Business

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What term describes a system where financial institutions can increase the money supply by lending out funds deposited with them, thereby facilitating economic activity and growth through credit creation?
a) Fractional reserve banking
b) Monetary expansion mechanism
c) Credit multiplier system
d) Loan multiplication model

Sagot :

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