Question

Explain the creation of credit by commercial banks?

Answer 1

Answer:

Commercial banks create credit by advancing loans and purchasing securities. They lend money to individuals and businesses out of deposits accepted from the public. ... After keeping the required amount of reserves, commercial banks can lend the remaining portion of public deposits.

Explanation:

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Answer 2

Answer:

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Commercial banks create credit by advancing loans and purchasing securities. They lend money to individuals and businesses out of deposits accepted from the public. ... After keeping the required amount of reserves, commercial banks can lend the remaining portion of public deposits.

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