Do you consider a commercial bank to be a "creator of money' in the economy?

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Solution

Yes, commercial banks act as a creator of money in the economy. They create credit in the form of demand deposits related to the loans offered by them. Thus, banks create credit by advancing loans.

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Do you consider a commercial bank ‘creator of money’ in the economy’?

Commercial banks do not have the note-issuing authority, but they do contribute to the money supply in the economy. Comment.

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