Question

question 11 (1 point)
banks create money by
printing dollar bills without limit.
creating deposits without limit.
printing money up to their required reserve limit.
making loans and creating deposits, a process that is limited by the size of banks excess reserves.
buying u.s. government securities with cash.

Explanation:

Banks create money through the process of making loans. When a bank makes a loan, it credits the borrower's account, which creates a new deposit. This deposit is a form of money. However, this process is limited by the bank's excess reserves. Excess reserves are the reserves that banks hold above the required reserve ratio. The required reserve ratio is the percentage of deposits that banks are required to hold as reserves. If a bank has more excess reserves, it can make more loans and create more money. Printing dollar bills is the role of the central bank (e.g., the Federal Reserve in the U.S.), not commercial banks. Creating deposits without limit is incorrect because it's constrained by reserves. Printing money (again, central - bank function) up to reserve limit is wrong as banks don't print. Buying U.S. government securities with cash is an open - market operation (a central - bank tool for monetary policy, not a way for banks to create money in the traditional sense of deposit creation through lending).

Answer:

making loans and creating deposits, a process that is limited by the size of banks' excess reserves.