Question #60
Commercial banks should applaud the government going into deficit because
- they generate an optimistic environment for investment which increases the proportion of credit-worthy customers.
- they finance non-government saving which means the banks get more deposits which means they can expand credit to make profit.
- they provide net additions to bank reserves which increase their capacity to lend.
Answer #593
Answer: they generate an optimistic environment for investment which increases the proportion of credit-worthy customers.
Explanation
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