Question

The process of banks making loans in financial capital markets is intimately tied to the:

A. redistribution of wealth.
B. financial stress levels of banks.
C. creation of money.
D. home construction industry.

Answer 1

The process of banks making loans in financial capital markets is intimately tied to the creation of money. When banks create loans, they effectively create new money in the economy.

Step-by-step explanation:

The process of banks making loans in financial capital markets is intimately tied to the creation of money. The process of banks making loans in financial capital markets is intimately tied to the creation of money. When banks create loans, they effectively create new money in the economy. When banks create loans, they effectively create new money in the economy.

This is because most of the money in the economy is a result of bank loans that institutions repeatedly re-deposit and loan. For example, when a bank approves a loan for a business to invest in new equipment, the business receives the loan as money which can then be used to purchase the equipment. This injection of new money into the economy allows businesses to grow and the overall economy to expand.