Banking Awareness - Basics Of Banking & Banking Terminology
Which concept explains how a single deposit leads to multiple loans?
Which concept explains how a single deposit leads to multiple loans?
medium Q4 of 15
Step-by-Step Solution
Step 1: Identify the process
The question refers to multiple lending from one deposit.Step 2: Apply banking theory
This process is known as credit creation.Final Answer:
Credit creation → Option BQuick Check:
One deposit → many loans = credit creation ✅
Quick Trick: Multiple loans from one deposit = credit creation.
Common Mistakes:
- Confusing with interest calculation.
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