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Which factor affects the credit creation process based on the banking habits of people?
  • a)
    Amount of deposits
  • b)
    Cash reserve ratio
  • c)
    Supply of securities
  • d)
    Willingness of people to borrow
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Which factor affects the credit creation process based on the banking ...
The text mentions that the banking habits of the people can affect the credit creation process. If people have well-developed banking habits and conduct most of their transactions through banks, it can lead to an expansion of credit. On the other hand, if people are not willing to borrow from banks, it can limit the credit creation by commercial banks.Interesting additional fact: The willingness of people to borrow is influenced by various factors such as interest rates, economic conditions, and individual financial situations. When people are confident about the economic outlook and have access to favorable borrowing conditions, they are more likely to borrow and contribute to credit creation.
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Which factor affects the credit creation process based on the banking habits of people?a)Amount of depositsb)Cash reserve ratioc)Supply of securitiesd)Willingness of people to borrowCorrect answer is option 'D'. Can you explain this answer?
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