3 ms·
How so? Borrowed money can only be re-lent if the person who borrowed it puts the money in a transaction account. Why would anyone bother to do that?
by gowld 7y ago
How so? Borrowed money can only be re-lent if the person who borrowed it puts the money in a transaction account. Why would anyone bother to do that?
- jstrom 7y agoWe typically assume that loans are taken for some immediate use (rather than just having cash on hand). Thus you get the following scenario: Bank loans $money to person A. Person A uses the $money to buy from person B. Person B deposits $money into the Bank. Bank now has $money (less reserve requirements) available to lend.