1) Funds for loans to borrowers can be created in the U.S. economy by: I. Depository...

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Question

1) Funds for loans to borrowers can be created in the U.S. economy by: I. Depository...

1) Funds for loans to borrowers can be created in the U.S. economy by:

I. Depository intermediaries lending more money than they receive on deposit

II. Depository intermediaries increasing the velocity of circulation of the existing money supply

III. Non-depository intermediaries increasing the velocity of circulation of the existing money supply Select one:

A. I and II only

B. I and III only

C. II and III only

D. I, II, and III

2) Which of the following can increase the velocity of circulation of the money supply when making a loan? Select one: A. Commercial banks B. Insurance companies C. Credit unions D. All of the above

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Answer 1

Answer #1

1) Funds for loans to borrowers can be created in the U.S. economy by

I. Depository intermediaries lending more money than they receive on deposit

II. Depository intermediaries increasing the velocity of circulation of the existing money supply

III. Non-depository intermediaries increasing the velocity of circulation of the existing money

Answer: D. I, II, and III.

All the given options can create funds for loans to borrowers

2) Which of the following can increase the velocity of circulation of the money supply when making a loan?

Answer: D. All of the above
Commercial banks , Insurance companies and Credit unions all can increase the velocity of circulation of the money supply when making a loan.

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Answer 2

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