Which example best describes how a bank injects money into the economy?
A bank opens a savings account for a customer.
A bank approves a loan for a customer.
A bank buys a company's rapidly growing stock,
A bank buys property in a bustling business district.

Banks function as a link between the people or organizations who have surplus capital and others, who need capital to invest it for their business. They help the business to raise, improve, and expand. Most companies have failed to grow their businesses because they lack the resources to do so, and bank loans help tackle this issue by providing loans to them.

ewomazinoade ewomazinoade · Answer 2 · 2022-03-16T11:05:33+01:00

A way a bank injects money into the economy is to approve a loan for the customer.

How do loans increase money supply in the economy?

When banks grants loans to customers, it increases the money supply in the economy through the multiplier effect.

Money multiplier = loan / reserve requirement

Assume the loan amount is 10,000 and the reserve requirement is 10%. The increase in money supply would be 100,000.

To learn more about money multiplier, please check: https://brainly.com/question/25812353

Which example best describes how a bank injects money into the economy? A bank opens a savings account for a customer. A bank approves a loan for a customer. A bank buys a company's rapidly growing stock, A bank buys property in a bustling business district.

Respuesta :

How do loans increase money supply in the economy?

Otras preguntas

Which example best describes how a bank injects money into the economy?
A bank opens a savings account for a customer.
A bank approves a loan for a customer.
A bank buys a company's rapidly growing stock,
A bank buys property in a bustling business district.