Chapter 17, Problem 10Q

To determine

How the money supply is affected by a) Central bank b) Banks c) Depositors.

Concept Introduction:

Banks −Financial institutions that offer banking services like providing loans, accepting deposits and other financial services to the customers.

Central Bank − Independent national authority which regulates the banks, conducts monetary policies, offers financial services and aims to avoid inflation, make the national currency stable and reduce unemployment.

Depositor − A money lender whose money is deposited with the bank and returned to him or her at the end of the period of deposit.