Question

When banks make loans, the money supply ____. - decreases - increases

Answer 1

the loans  increases the supply amount because of the rating of the bank 

Answer 2

Increases

Step-by-step explanation:

The money supply is the total amount of money that exists in an economy at any point in time. Therefore, it can also be equated to the currency that is in circulation. When a person takes a loan offered by a bank, he receives money. He then uses this money to purchase things in the economy, putting the money in circulation. Therefore, a loan from a bank increases the money supply of the economy.