Usborne Money Reading for Beginners - How Banks Create Money

Which sentence is correct?

• Banks lend money that they already have.

• Banks create money to lend people.

In Jack's example, the bank created money on a ____ to lend him.

When Jack pays back his ​ (a)   , the bank will ​ (b)   the money that they ​ (c)   .

• loan
• cancel out
• created
• computer
• cash

How many percent of banks' money has been created by the computer like this?

• 50%

• 70%

• 97%

• 100%

Who created cash?

• Banks

• People

• Governments

• Printers

People worldwide has ___ decided to take out their deposits all at once.

A ​ (a)   happens when lots of people withdraw their deposits all at once.

• bank run
• bank walk
• banking

If a bank runs out of cash, it still works well as normal.

• True.

• False

Bank runs can be prevented by....

• Borrowing cash from other banks.

• Setting limits for how much money people can withdraw each day.

• Do not give people's money back in cash.

• Insuring deposits

Insuring deposits means ___ promise to pay depositors their money if the bank can't.