Your friend Sarah borrows money from her bank to buy a car. Explain to her the transactions in which the bank sets up the loan, and why the loan involves an increase in the money supply.

Economics Today and Tomorrow, Student Edition
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ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter14: Money And Banking
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Your friend Sarah borrows money from her bank to buy a car. Explain to her the transactions in which the bank sets up the loan, and why the loan involves an increase in the money supply.
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