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When banks make loans, they put more money into the economy.

This increases the _____.

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When banks make loans, they put more money into the economy.

This increases the _____.

Answer

When banks make loans, they put more money into the economy.
This increases the money supply.
Is important to understand that the banks are the intermediares between the Federal Reserve (as the monetary authority) and the economic agents (people like you and me, and the companies).
When they make loans there's more money flowing, the credit rises and the interest rates go down (more supply, the lower the price).

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Virtual Teaching Assistant: Colleen R.
Question Level: Basic
Karma: Free
Upload Date: 5/31/2017

This 15 words question was answered by Colleen R. on StudySoup on 5/31/2017. The question contains content related to Business Since its upload, it has received 148 views.

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