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. When they grant a loan, they create new deposits in the borrower's account, which increases the money supply. All other options involve the transfer of existing money, not the creation of new money.

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