Question

which example best describes how a bank injects money into the economy?
a bank opens a savings account for a customer.
a bank approves a loan for a customer.
a bank buys a company’s rapidly growing stock.
a bank buys property in a bustling business district.

Explanation:

To determine how a bank injects money into the economy, we analyze each option:

• Opening a savings account (first option) is a deposit, not injecting new money into the economy.
• Approving a loan (second option) provides the customer with money (credit) that they can spend or invest, increasing the money supply in the economy as the loaned money circulates.
• Banks typically don't buy stocks (third option) as a primary way to inject money, and this is not a standard banking function for money injection.
• Buying property (fourth option) is an investment for the bank, not a direct injection of money into the economy for circulation.

So the best example is a bank approving a loan for a customer.

Answer:

B. A bank approves a loan for a customer.