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QUESTION
How does the private banking system create money (use M1 as the definition of money supply)?
How does the private banking system create money (use M1 as the definition of money supply)? (Private banks are the ones like you, your family, and your friends do their banking at.)
A) Printing and distributing paper money.
B) Buying government bonds.
C) Minting coins.
D) The private banking system cannot create money.
E) Lending a fraction of their deposits.
