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All but which one of the following is a constraint on a deposit creation by the banking system ? Give 150 word minimum explanation on your answer. A. Willingness of people to hold deposits b. Willingness of banks to lend c. Willingness of people to borrow d. Government regulation e. U.s. treasury gold reserves

Question

All but which one of the following is a constraint on a deposit creation by the banking system ? Give 150 word minimum explanation on your answer. 

A. Willingness of people to hold deposits 

b. Willingness of banks to lend 

c. Willingness of people to borrow 

d. Government regulation 

e. U.s. treasury gold reserves 

check_circleAnswer
Step 1

Banking system:

Banking system refers to the process of accepting deposits from the general public for the motive of lending or investment. However, the money deposit by people is repayable on demand.

Step 2

Option “A” Willingness of people to hold deposits is the correct answer because it depends on the capacity of the commercial bank framework to make new bank deposits and consequently increment the money supply. Commercial banks acknowledge or accept deposits of currency from the overall population. A portion of this cash is ...

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