Commercial bank creates credit.

True

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False

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Solution

The correct option is A True
A commercial bank is a financial institution which accepts deposit from people and offers loan for the purpose of consumption or investment. The main function of commercial bank is to create credit through the primary deposits which it receives from the public in order to provide more credit to the public and generate money in the economy.

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The central bank controls credit but commercial banks create credit. State true or false.

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