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No, in the United States banking system, when a bank loan is repaid, the money supply goes down by the amount of the principal that was paid off. When banks lend out money, that money is created out of thin air by a accounting journal entry, and the money supply goes up by the amount of the loan. When the loan gets paid off, that money disappears back into thin air and the money supply goes back down.
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Why was the creation of a national bank so important to the U.S economy?
The national bank controlled the money supply
What is the difference between a bank loan and notes payable?
I think a bank loan is when money is borrowed from a bank with the expectation that it will be repaid, and notes payable is then the accumulation of all loan amounts expected to be repaid according to each note (the legal document with the stipulations).
What does Loan Loss allowance mean?
Amount of money that a bank might lose because of its loan not being fully repaid.
Do you owe the bank anything if you stop making mortgage payments?
If the bank loaned you the money for the morgage and have not repaid it all then yes you do. Or any other outstanding debts you may have with them
What is responsible for controlling the money supply?
Federal Reserve Bank
What do the feds want to do to the money supply to encourages bank loans?
increase
Why was the creation of a national bank so important to the U.S economy?
The national bank controlled the money supply
How does increasing money supply affect expansionary monetary policy?
Expansionary Monetary Policy is adopted by the monetary authorities to increase the money supply of an economy. If money supply is increasing, and central bank adopts an expansionary monetary policy, it would result in inflationary pressures.
What is the difference between a bank loan and notes payable?
I think a bank loan is when money is borrowed from a bank with the expectation that it will be repaid, and notes payable is then the accumulation of all loan amounts expected to be repaid according to each note (the legal document with the stipulations).
Why is the supply of money in an economy not solely determined by central bank?
The supply of money IS controlled by the central bank. However, in some countries the politicians interfere with the Central Bank.
What factors determine money supply?
factors which determine money supply is: open market operations, variable money supply bank rate policy.
What does Loan Loss allowance mean?
Amount of money that a bank might lose because of its loan not being fully repaid.
What are the factor that effect money supply?
Bank rate
Do you owe the bank anything if you stop making mortgage payments?
If the bank loaned you the money for the morgage and have not repaid it all then yes you do. Or any other outstanding debts you may have with them
Will money supply increase decrease or stay the same if banks cannot find borrowers?
inflation It depends on the definition of money you are using. If your definition includes "bank credit", the supply clearly falls. If you are using M0 money defition, is does not matter (if the question involves the IS-LM graph, use this answer)
What agencies determined money supply?
Money supply is determined exogenously by the monetary authority usually central bank of a country.
What do the Fed do to the money supply to discourage bank loans?
decrease
