Banks create bank money by granting loans

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The traditional view adopted in the money supply debate is that banks create bank money by granting loans. This explanation is then extended to suggest that banks thereby create money out of nothing. However, this is an inadequate caricature of the process of bank money creation."

Is this statement true or false? Do peoples opinions often depend most on the quality of the source? Why? Explain

Reference no: EM132351005

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