In essence, which of the following groups "creates" money?
A) Banks' loan officers when they grant loans
B) Consumers when they go shopping
C) Depositors when they deposit or withdraw money from their banks
D) Firms when they pay workers their wages and salaries

Question

Quizplus · Accepted Answer

Banks' loan officers create money when they grant loans through the process of fractional reserve banking. When a bank grants a loan, it credits the borrower's account with newly created money, allowing the borrower to spend more than they had before. This increases the money supply in circulation.

In Essence, Which of the Following Groups "Creates" Money