9
QuizMultiple Choice

Banking

Question 9 • * HSA 26-27 Economics

Which example best describes how a bank injects money into the economy?

Answer
A
A bank opens a savings account for a customer.
B
A bank approves a loan for a customer.
C
A bank buys a company’s rapidly growing stock.
D
A bank buys property in a bustling business district.

Explanation

When a bank approves and issues a loan, it typically credits the borrower’s account with newly created deposit money. The borrower can then spend that money, adding to the money circulating in the economy. Opening a savings account moves or holds existing funds; buying stock or property is an investment, not the clearest example of a bank creating new money through lending.

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