alleryMatch cash creation: 1. Loans: p. New money 2. Account: q. Liable 3. Ratio: r. Reserves
A1-p, 2-q, 3-r
B1-p, 2-r, 3-q
C1-q, 2-p, 3-r
D1-r, 2-p, 3-q
Answer & Solution
Correct answer: A. 1-p, 2-q, 3-r
Banks issue new money when they make loans while holding a required minimum level of reserves against deposits.
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