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Banks use public deposits of money to create loans. Here money is mainly acting as ______

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Question

Banks use public deposits of money to create loans. Here money is mainly acting as ______.

Options

  • Store of value

  • Measure of value

  • Basis of credit

  • Medium of exchange

MCQ
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Solution

Banks use public deposits of money to create loans. Here money is mainly acting as basis of credit.

Explanation: 

Deposited money forms the base on which banks create credit and grant loans.

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